And if Sound Forge is more pro I'll look at that as well. Even if it's paid if the price is right that would be useful for a bunch of my wacky ideas. Cheers.

Audacity should run fine on your laptop. Technically using Audacity does involve an audio interface, but it will run fine on the built in sound in your laptop. Remember that the maximum quality you can record over the internet is the resolution/compression it is broadcast at. So using even standard CD quality to record it at is more than enough. If you are having problems finding your sound chip to link it to Audacity ("no recording device" error in the recording dropdown) read this:
http://wiki.audacityteam.org/wiki/Mixer_Toolbar_Issues#vistacp 

Thanks, slartabartfast. I've been meaning to set the lappy up to take the Scarlett properly but I also want to learn how to use my internal stuff too so this is extremely educational and useful info for me. There are many many ways I'll be able to use these concepts. There was another kind fellow on here explaining how I could use X1 on it as well even though it is below system requirements which would be cool too. I was gonna resort to Reaper for that stuff but I find it to be a little confusing and unwieldy. Cheers.

What about using a media downloader in chrome or firefox, if it's flash or an mp3 stream video download helper for firefox should save it to your hardrive, that would be a same-quality recording also...

is it possible to change from ASIO to MME?...If some then you should be good to go....you may have to route the inputs (ie line 1/2 internal), but under mme mode, they should all be available....WDM may work too...I record streams all the time....If ASIO is the ONLY option, perhaps try downloading asio4all, and use that driver temporarily....that could work as well....you should then be able to go into wdm mode, or mme mode in sonar...

@shawn... Hi there. I'll check that option out too. And thanks again for letting me know the lappy might be able to handle a full X1 install.

@DayDay... Recommended driver is ASIO for the Scarlett so I'm gonna stick with that for now. Knowing me I'll just screw something up if I try to get fancy and I have everything running properly finally. This thread has given me many good options. I absolutely love this forum. So helpful. Cheers guys.

one more thought - has anybody suggested any of the freeware audio capture drivers like freecorder, where you just save the audio as a wav or mp, then import it after the fact?

Is there going to be video as well? I use a program called Jing(free version), that allows you to record the video, and audio of whatever is on your screen. There is a time limit on free, but can buy the bigger version-price? I use it for short tutorials for friends. Here is what it looks like...http://www.screencast.com/t/DpvIEQmdnfs8

To record streaming audio from the web I usually:

1. change the Windows default audio device (both record and playback) to the onboard soundcard;
2. record it using Audacity;
3. crop if necessary;
4. export to WAV;
5. change the Windows default audio device back to the decent soundcard;
6. import the WAV file into a Sonar project.