Sound Flower

From Jtvcommunity

Sound Flower is a virtual audio device that provides an easy and simple way for Max/MSP and other applications to send and receive audio to and from any other application. Running with very low latency and CPU usage, Soundflower allows each client application to use its usual buffer size. Soundflower includes an uninstaller.

Tutorial

Once installed, you can select soundflower from the system preferences (sound -> output) as the 'speakers' to use for the Mac. Next, you go to the video application you're using and select soundflower as the microphone to use.

At this point, every sound your mac makes will be routed directly to your video application. In fact, you won't even hear it yourself. That's where the soundflower application comes in. With that, you can monitor the audio with your speakers.

To make audio routing with Sound Flower a little easier, CamTwist supports the ability to select the audio device for use with movie playback. With that feature, you can avoid routing all mac audio to soundflower (skip the system preferences step) and just route CamTwist audio to soundflower.