This is for MAC users only...will post PC solutions soon!

There are MANY ways to record Skype calls but this one will cost you absolutely nothing. I may update this post later to show other ways and its steps. So....

Here's how to record Skype calls:

1. Download and install the following softwares. Restart your computer if prompted.

Soundflower (Free)
LineIn (Free)
Garageband (comes pre-installed with new Macs)

2. Set the preferences of the following softwares as shown below.

FOR GARAGEBAND:
Garageband >> Preferences >> Audio/MIDI

Audio Output: Built-in Output 
Audio Input: Soundflower (2ch)

FOR SKYPE:
Skype >> Prefences >> Audio

Audio output: Soundflower (2ch) 
Audio input: Soundflower (2ch)

FOR LINEIN:
Input from: Built-in Microphone
Output to: Soundflower (2ch)
Pass Thru: Enabled

FOR MAC OS SYSTEM PREFERENCES:
System Preferences >> Sound >> Input

Choose a device for sound input: Internal Microphone

Check the check box for 'Use ambient noise reduction'

3. Create a new 'New Track' (keyboard shortcut: Option(alt)+Command+N) in Garageband

4. Choose 'Real Instrument Track' and click 'Create'

5. Start calling friends or setup conference calls in Skype and just simply click on the 'Record' button on Garageband to start recording the Skype calls. 

 Mabuhay!
(Filipino for 'live long and prosper')