I couldn't work out any easy way to listen to the line-in input on my MacBook; GarageBand was being slow and obnoxious, and searching here for hints didn't yield anything either.
Google helped me find a neat little application though: LineIn by Rogue Amoeba. It's free on their freebies page.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20061004211146807