Here's the process in a nutshell.....
1. You need to make sure your computer allows for audio input
2. You need a cable that connects the computer to the amplifier or headphone outlet (he got his at PC World)
3. You run the software and use the feature to record then start playing the album
4. Once its recorded, it gives you one big file which you can breakdown and edit and rename into the individual songs.
5. Its now a digital file that you can burn to CD, put into iTunes, etc.
Sounds a bit complicated to me but I think once you've done it once, its pretty easy. He used to send me mixed CD's he made me from his album collection before I moved over
I'm sure Paul or Dennis!! will come along with more info as well.