Information:
VSound is sort of like a virtual audio loopback cable.
That is, it allows you to record the output audio stream of a program. This is similar to the process of connecting a loopback cable to the line-in and line-out jacks on the sound card, and recording the sound from the line-in jack without the DA/AD conversion losses.
One possible use for this application is as part of a RealAudio-to-WAV file converter.