I tried this when I got the Peanut, it comes with a cable to go from an MP3 player to the Peanut, both ends are the same size as headphone outputs (3.5mm or 1/8"). It didn't work, and that's when I was told I needed another interface kind of thing (I forgot the name). But, I'll try this again. Thanks!!!!
Weird. I don't have a peanut, but it works perfectly on my Eleuke concert pineapple. I've recorded many tracks that way...
Make sure that you use the right jack on the Eleuke - the headphone jack, NOT the mp3 jack. Also, make sure to switch the audio input on your Mac, via the sound preferences panel, or in GarageBand itself. It must be switched to Line In.