Some folks in Macworld's OS X forum are scratching their heads about how to record telephone conversations in Panther. The couple of people who've tried have encountered more-than-distracting hum and background noise. For help I turned to two folks who do this kind of thing on a regular basis.
Shawn reports that in his early days of online broadcasting (before he had the budget to hire professional audio engineers to do the job), he'd use a speakerphone and point a microphone at it. He cautions that if you go this route, you use a full-duplex speakerphone -- one that ensures that the voice on the other end of the line isn't muted when you talk over it.
Gene offers similar advice. He uses a high-grade speakerphone, a microphone, and an OctiVox Clear Call a $180 device that maximizes the audio output of the call so it's suitable for broadcast. Gene suggests that if you're willing to use a go-between device for recording conversations, you visit Ahern Communications' site.