Yes, you can record direct from your soundcard's audio output to the audio
input of a tape deck or MP3 recorder, if it is capable of accepting analog
You can download a program (free) known as CWENC and it will integrate with
Audacity so that you can generate MP3 files and save them to disk. Audacity
is capable of saving to the .wav file format as it comes.
While using CWENC does not technically run the signal through your sound
card to record the file in MP3, it does what you are implying that you want
it to do. Once the file has been made, you simply click on it with the left
mouse button and Windows Media Player should jump up and begin playing the
file in audio for you.
MP3 and .wav files are the universal file formats for audio/music at the
There is lots of support on the net for Audacity and for CWENC, if you run
into a problem integrating the two. Usually the process is completely
automatic when you install CWENC.