There are lots of options with the mac.... Just to refine my answer (hope I'm not over-explaining)....
If you use the built in iSight camera & mic to capture video and audio with either iMovie or Photobooth, you can adjust the input level as described and get pretty good sound quality.
If you want better sound quality, you can get a USB stereo microphone and plug it in. In your System Preferences, change your audio input to the microphone, then record. You end up with much better quality sound. iMovie has some basic audio editing capabilities that will allow you to refine the sound a bit, but even with Photo Booth, you'll end up with better sound. This is a pretty easy option and doesn't require the extra time of syncing up the audio and video in iMovie - the two are captured together.
I like using Garage Band for the audio - you can do multiple tracks and use all of their preset equalizers and effects to really fine-tune the sound. I also have to do this because I don't have a stereo USB mic - I have a fairly nice analog mic, so I just got a digital audio interface which allows me to plug it in to the mac, but the signal into the computer is mono, not stereo. I have to use Garage Band to process the recording to get a stereo finished product. The interface has other advantages, though - it serves as a preamp and also allows me to record any analog instrument with a 1/4 audio out, so I can get a good signal for my guitar, bass, keyboard, etc. This is where you end up with separate video and audio that takes a little work (it's pretty quick, though) to integrate using iMovie. Also, to clarify - you really need an external microphone for this - either a USB stereo mic or an analog mic w/ an interface.
If you want to keep it simple, just turn down the input level and rock out.
If you want to spend a little ($50-$100 minimum) to get a much better sound, pick up a USB stereo mic.
If you want to be able to record other instruments and have a few more options, pick up an interface. This (
LINK) is what I've got and it's extremely easy to use.
I'm certainly no expert - I just really started doing this stuff the last month or two - but here are two example to compare.
Recorded this one using the iSight camera and built in mic - I didn't have the input level low enough, so it clips pretty bad.....:
This one uses the external mic with the sound mixed in Garage Band. It took me about 15 minutes to sync up everything and do final processing with iMovie. (I still had the recording level a bit high, so there's a little clipping.... I was just too lazy to go back and fix it).
hope this helps.....