Audacity is a free sound recorder/editor. You can record music from any source on your computer and save them out as either Wav, MP3 or Ogg Vorbis(.ogg). The only recording time limit is the size of your hard drive.
You can also load music files in different formats (WAV, AIFF, AU, MP3, OGG) and edit them as well as add effects. You can have many tracks active at the same time and mix between them as well as completely manipulate the volume and wave form of each.
This is the poor man's digital recording studio.