I'm also having the same problems; I just bought Toast 9 and downloaded the update. I eventually found the obscure online instructions to capture audio, though it is advertised on the front of the box and not in the manual; have repeatedly installed the prog as intsructed, but it still doesn't show up in the input device. I'm running Leopard 10.5.5.
This is my first purchase of Toast, but I definitely wont be buying any more Roxio products. What a dreadful company!