Using a plugin called Output Stacker for Winamp, you can actually record whatever is being played through your soundcard, whether its Napster, an internet radio stream or RealNetwork’s Rhapsody. The recording is saved in a .WAV file which you can burn to CD and then re-rip back to your computer. The .WAV recording has to be done in real time though, and the album information will not be present. This has been common knowledge to most Winamp users for some time. Unfortunately Napster has been target in the press.
The Napster spokeswoman said “The DRM (digital rights management) is intact. Basically, people are just recording off a sound card. This is nothing new and people could do this with any legitimate service if they want to use a sound card”.
Read more at Reuters
Found out how to do this in the Designtechnica forums