The current version of WireTap Anywhere is not fully compatible with Mac OS X Lion, 10.7. Changes in Lion will prevent you from capturing application specific audio. You can continue to route all Mac Audio and/or your input devices.
It is unlikely that full functionality will be restored in Lion since Apple only made the resources for a proper fix available in Mac OS X Mountain Lion, 10.8. Please see "Is WireTap Anywhere compatible with Mac OS X Mountain Lion, 10.8?" for the most current information.