The way I do this is to split the output (the sound coming from the other end of the line) from the iPhone - one signal to the earbuds so you can hear it and one to the computer's line-in input for recording. The input (your voice) is heard by the folks at the other end because there's a mic on your earbuds picking it up and sending it back to the iPhone. However, the computer can't pick that up, so I configure the recording device (in this case, WireTap) to also record what's coming in the computer's built-in mic. This way you've got both sides of the conversation available in the recording. This is one of the great things about WireTap - it can record from two sources at once.
Getting Started
There are a few things you'll need to get if you don't already have:
- An iPhone (actually any phone that has a mini-jack in/out will work)
- Earbuds with microphone. The ones that came with the iPhone work well. I have these and they are great. I'm sure a headset would work too.
- A mini-jack splitter (couple bucks at RadioShack)
- Male-to-male mini-jack cable (couple bucks at RadioShack)
- WireTap Studio software. Despite the name, recording phone coversations is actually not what it's designed for! It's a bit spendy at $69, but you can do a free 30-day trial with no software limitations.
Setting Up
Plug the splitter into the jack of the phone. Then plug your earbuds/headset into one of the splitter's jacks, and the direct male-to-male cable into the other. Plug the other end of the male-to-male cable into the microphone input on your mac.
Starting the Recording
Once you have the phone and cables in place, start up WireTap. if the small black controller isn't visible, go Window (menu) -> Controller to view it. In the controller window, configure the first input to be "Line In", and the second input to be "Internal Microphone". See below for example.
At this point, you may want to do a test call to be sure your levels are correct. Just hit the round "record" button on WireTap's controller and place a call (maybe to a friend or an 800 number you know will be answered by an automated system, like your bank). Be sure that you hear at least 30 seconds of sound from the other end, and make sure you talk as well to get an accurate sampling of sound from both ends.
After hanging up, hit the "stop" button on WireTap's controller, and switch to the "Library" window. (Window Menu -> Library). Your recording will probably be called something like "Built-in Input_recording". You can highlight it and play it right from that window, or you can double-click it to view in the editor. When viewing in the editor, the neat thing is that WireTap shows the sound waves for each source separately (they are color-coded). In the example below, my voice is purple while the caller's voice is grey.
Listen to the levels, if one side is too low or too high, you can adjust the levels. Go System Preferences -> Sound to open the Sound Settings window. The two lines you want to edit are the "Internal Microphone" and "Line In". You can even do this during your test recording so that you are seeing the actual sound in the level meters. If too low or too high, adjust slider bars. I've found checking the box "Use ambient noise reduction" for the Internal Microphone works well.
Once you have your levels right and can hear both sides of a test conversation, you're ready to record! You can export your recordings from the WireTap library as MP3s (highlight your recording and hit the "Local" button), which is good if you want to catalog elsewhere on your computer.
Update 2009-07-23: by request, here's an example of a recorded phone conversation using this method:


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