I have a Sony MZ-R70 with the Digital PC link that connects to the computer via USB and the mini via optical in. It works out of the box in both 9 & X (which is kind of funny since Sony cliams that it doesn't, and after about an hour of trying I never did get the thing to work with my PC). In Preferences/Sound/Output the mini disc appears as "MD-PORT DG1" and you can either send the Mac's sound output to either it or the "Built-in audio controller" but not both at the same time. The mini Disc then records the sound in real time, nothing fancy.
The MZ-R70 only has optical in and headphone out, so I don't know if the PC Link gizmo is two-way or not. But unless you're an audiophile willing to plop down a tidy sum of cash, the headphone out to the mac's line in should work just fine. If ITunes doesn't record line in audio, then there's some other shareware that will that you can find on VersionTracker.