I got Soundtap to work with the free version so went ahead and purchased it. I have a mac 10.5.8. Now it intermittently works. I have all the problems you mentioned . Even if I use the same settings I will sometimes get a crystal clear recording or nothing. I get noise if soundtap is set as output device. I have noticed that if I get a crystal clear recording then it's when I can not listen to it as it won't allow this . This is even if the 'listen whilst recording ' box is ticked.