Recording Advice:

Look for audio lines on XP, or audio devices on Vista/7 - ‘Record Master’, or ‘Stereo Mix’, or ‘What U Hear.
Configure your program to record from that line/device then you will be able to record YouTube music.
Mute the microphone line/device before starting the recordings - right click volume icon next to the time display on your desktop
Test your first pieces of recording to see if your volume levels are OK and if the quality is what you need.
Remember to turn off Windows sounds when recording: Control Panel > Sounds > Sounds > Then select the ‘No Sounds’ scheme.

Programs

Sources of Free Music and Sounds

DMusic
Incomptech - Royalty Free Music; Search by Genre or "Feel" of Music
Free Music and Sound Sources
The Free Music Archive - freee music under creative commons licenses
PodSafe Audio - musicians share music for free
PodSafe Audio is a community of musicians who create music and share it for the purpose of fair-use in podcasts.
Sound Bible - free sound clips, sound effects and sound bites. Public domain or lCreative Commons license.
E ducation page on Royalty Free Music - teachers and students can use sounds under fair-use policy
Jamendo - many free and legal music downloads from musicians. Uses Creative Commons license.
Wolfram Tones - user can generate own sounds by mixing samples. Download sounds to computer or cell phone.
Monkey Machine is a free web-based program that allows students to experiment with drum set sounds and rhythms and downloadable to a .midi file.
Music in the classroom - excellent site of music lyrics, categorized: http://www.learningfromlyrics.org/songs.html

How-to Videos

PCWinSoft tutorial on how to record Internet video: http://blog.pc-windows-software.com

Audio Tools