A few weeks back I posted about recording Skype calls on OS X using only freely available tools, and it worked out pretty well, but it had one annoying flaw: I could hear my own voice coming through the headphones, which often tripped-up my speech pattern. So I did some more Googling and I managed to cobble together enough scraps of information to workout a slightly improved version of my original configuration.
The two main differences from the original setup is the replacement of Audacity with GarageBand and the use of the 16ch in Soundflower instead of the 2ch.
1. LineIn: Choose the "Advanced" button, set the Output to the "Soundflower (16ch)", and set the Left and Right Channels both to "2". Why both on channel 2? Because channel 1 is what's going to be coming out of the headphones, and we don't want to listen to ourselves talk.
2. Skype: Set the input to your mic and the output to "Soundflower (16ch)" - it's going to use channels 1 and 2 automatically.
3. Soundflower: Under (16ch), set Channel 1 to "Built-in Output". That's going to be your left ear in the headphones. Set Channel 2 to "None" because, as we established above, your voice is going through there andyou don't want to hear yourself talk.
4. GarageBand: First make sure you've set the Audio Input to "Soundflower (16ch)", then select the track you want to record to - if you're using the old version like me, you can only record to one track at a time - and set the Input to "Channel 2 (Mono)". Remember that's the aggregation of Skype and LineIn, so GarageBand is going to record both you and the caller.