You can also use Audacity to record live from whatever input you choose, and it's really easy to edit and play around with your results.
You can also use it to add fade ins and outs, cut them out altogether and add a variety of interesting effects. With Audacity, you can tweak the volume of the track so it's at a similar level to the rest of your library however loud it is. You can alter the base volume of tracks in iTunes, but the actual file is not affected, and the end result is many files that play at different volumes.
One basic useful tool for this is making tracks louder or quieter.
