you have to download atleast the music itself ;)you can use keepvid to download mp4 filesto convert them to mp3 should not be an issueand i guess itunes can open mp3
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All steps can be reduced to one step: copy music from youtube to mp3 is the direct way out. Before recording youtube videos, you can save them as mp3 format, no need for conversion again.
dang i wanted to say the first thing