Alright, I searched around for a long time (alright, about 20-30 minutes...) to find something like this, and it does it pretty damn well.
Soundflower « Cycling 74
Essentially what it does is lets you route audio from one program to another. What does that mean? Well, to give just one example, say you are chatting with someone on Skype and wanted to also show them something on the guitar, but want to use an amp sim plugin rather than setting up your whole rig. You can load up your DAW (as long as it allows separate audio input and output settings, Ableton Live does, so does Garageband, Reaper does not, and don't make me laugh with Pro Tools), mix and process your audio however you like, set Soundflower as your output device, and also set it as the input device in Skype. Bam, instant professional mix on your end of your Skype call.
Would also be incredibly useful for anyone who live streams absolutely anything.
Basically, I was looking for a way to run multiple mics/sources into a software based mixer, and out to Skype or any other streaming program. It's not perfect, and it seems to add its own slight latency, but for a free program, it does exactly what I need.
Now, if someone could create a software based mixer that will take all of your audio inputs and sources (i.e. other programs playing audio like iTunes, etc.) and spit them out as a selectable audio source for any other program (essentially combining the mixer portion of a DAW with this app built in to manage routing), I'll be sold.
With an interface with enough inputs and a powerful computer with lots of ram, you could live stream an entire band, mixed in the box. Neat. As it stands, I would confidently use this program to live stream an internet radio show/podcast.
Hell, next Quigsfest, you could set something up to live-stream the jams