Mix mic audio and system audio and simultaneously record using Audacity

I have a similar need when recording Skype calls. My setup is somewhat different, but the fundamentals should work for your setup. Best of all, you can do it without buying any specialized applications. Rogue Amoeba has a great application called Line In that will allow you to pipe your system's inputs to whatever outputs you are available, including Soundflower.

1. Go to System Preferences -> Sound:

   • Select internal mic as your input if that's what you want to use as your second device. Your output is probably headphones if you're recording. Select that.

2. Start Soundflower.

   • Click the menu bar icon. Select Audio Setup from the bottom of the popup menu

3. This will bring up the Audio MIDI setup application. From here, you'll create an "Aggregate Device," which is accomplished by clicking the + icon in the lower-lefthand corner.

   • I've attached a screenshot so you can see how what the Aggregate Device I've setup here looks like. Your USB input should show up in this menu - add it as an input, along with your internal mic. Don't sweat the output part (that's in the next step).
   • Please note that the settings in this screenshot are not meant to be representative of how you should configure this on your machine, and are just for a visual cue.

4. Start Line In:

   • Set your input as the Aggregate Device you created, and pass that as output to Soundflower (2 Ch). When you're recording, you can select "pass thru," which will allow you to monitor the audio. Nice.

5. Finally, fire up Audacity, and make sure Soundflower is selected as the input. This should create a chain that ultimately pipes your inputs into Audacity.

I hope this helps, and good luck!

Turns out I had some strange Core Audio driver issue. Every time Skype was running, process "coreaudiod" would fire up and begin to hog CPU like crazy. I fixed permissions on my boot volume and it fixed a bunch of stuff related to iTunes, which apparently also fixed whatever was going on.

Once the coreaudiod issue was resolved, here's the setup that is working perfectly:

1. Skype "microphone" (input) set to Soundflower (2ch)
2. Aggregate Device created, consisting of Built-In Microphone and Soundflower (2 ch.)
3. Reason set to use the Aggregate Device
4. SoundflowerBed set to output to Balance.

Now all I have to do is create an audio track and enable monitoring, and I can hear myself in the mic, while normal Reason audio flows out both to Skype and my Balance to my headphones, and all is well with the world.