I am attempting to route my mic audio and system output so both can be heard through Skype. Any ideas?
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.
Maybe an aggregated device ? I use it for outputs, but it seems that you can also configure 2 inputs. See this Apple's kb article : http://support.apple.com/kb/HT3956