There is an AWESOME proggy called Magic Soft sound capture. It was freely available on the Internet but has become hard to find.
Basically it records what the speakers are playing (not thru the Mic, crappy) but thru Stereo Mix. It records it in whatever bit rate quality you like and if I remember correctly saves it as an MP3. You tell it when to start and stop recording. I have gotten lots of cool sounds from games using this program. Edited some of them to use on my cell phone.