I'd like to make a screencast that records both mic (audio input) and system sounds (audio output) at the same time. For example, so that I can capture a screencast while talking to someone on Skype and capture both sides of the conversation. How can I do this? (I'm using Natty if it matters.)

So far I have tried Kazam, RecordMyDesktop and Tibesti. (Tibesti explicitly has this feature but it doesn't seem to work. Kazam has existing enhancement requests for this feature.)

Please provide complete instructions/options, like those given for running RecordMyDesktop from the command line in this generic screencasting answer.