I needed to do this very thing a couple weeks ago. I lacked the time to do it properly so this is what I used:
1. cheap walkman
2. mini jack to mini jack connection
3. Audiocorder OSX
4. Sound Studio
I basically connected the walkman to my Ti Powerbook's line in jack. I used Audiocorder to import the audio and Sound Studio to clean it up and break it into tracks. I ripped it in AIFF to try and get the best quality possible. I then used iTunes to burn a CD.
The quality was acceptable but not stellar. If I had more time I would have used a real cassette deck and a USB audio interface device such as the Griffin iMic.
Hope this helps,
Jake