If we use SoundFlower to record the system's audio output, then we can't hear it at the same time? SoundFlower can let us play the system's audio to the SoundFlower 2 channel and record with this SoundFlower 2 channel, so QuickTime on Mac OS X Lion and record exactly what the system is playing for a game play.

And it works for 16 channels as well.

But is it true that while we can record the sound, we can't hear it?  So if we are playing a game and we are recording the video/sound, then we can't hear it.  I just wanted to set it up to record the ending credit and the song, but if it needs to be played without sound, then that's somewhat a problem too.
No. You can still hear the sound by creating a new audio device in Audio MIDI Setup. Go to the SoundFlower menu and click "Audio Setup". Audio MIDI Setup should popup up. Create a new multi-output device (click the + in the bottom left hand corner). Then set the settings as pictured below:

This will allow you to capture the system sound and still hear it through your speakers/headphones.