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I've done this with my old stereo/cassette unit and Audacity. Worked well.
I'd personally prefer to use GarageBand. I find it easier to use than Audacity, and GarageBand picks up the iMic when it's plugged in and asks you if you want to use that to record and you can change it in the GarageBand preferences, leaving your computer audio settings alone.
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2. Connect "Tape Out" (usually RCA jacks) to the RCA end of an inexpensive Radio Shack 'RCA to 1/8"' "Y" cable.
3. Plug the 1/8" end of the cable into the Mac (using an iMic, if required).
The iMic comes with a Female RCA to Male 1/8" adapter, so if you have a stereo RCA cable, you can use that.
If your tape player, however, has a headphone jack, you will need a "1/8" Male Phono to 1/8" Male Phono" wire. Your tape player volume should be set to about 75%. The switch on the iMic will also need to be at Line and not Mic. When the switch is on Mic, the input is provided power to amplify the microphone (professionally known as Phantom Power), which does not provide its own power generally, unless the Microphone is wireless, in which case the receiver is powered so the input does not need to be. Line input, however, is not powered because you have plugged something in, like the tape player, that is providing its own power and/or is amplified in some way.
Hope this helps :-)
-Parker