How can I route two audio sources simultaneously as inputs to Skype? I am attempting to route my mic audio and system output so both can be heard through Skype.  Any ideas?
SoundFlower

This is the traditional solution, and it is free. Although I am not sure if it's compatible with Lion.

Once you have it installed, you'll need to get familiar with the Mac OS X system utility, Audio MIDI Setup, in the Utilities folder.