As mentioned, I personally use this tiny program which ONLY records and plays - converts to mp3-on-the-fly with your choice of virtually any bitrate/frequency, and of course, choice of mono or stereo. When recording streaming, 32kbps is plenty and choose mono of course.
Here is a screenshot of the one I use in action... but Audacity gives you many other options, such as editing and doing other fancy things with any audio/song you might want to play with.