Long post on recording skype audio on a PC. Links at end.
I have used Skype for interviews for the last three years. I use it for both straight interviews, and for ghostwriting gigs. (Ghostwriting *requires* that I record interviews. I need good recordings to listen to and transcribe, to be able to write a piece in someone else's voice.)
Choosing proper audio recording tools is especially important (and difficult) for me, because I have serious hearing loss. Without high quality, reliable recording tools, I can't work.
The best tool I have found for recording Skype calls on the PC is a paid program called Callburner.
(Mac is a different world. From what my friends tell me, the Mac has simple, elegant handling of audio.)
I have tried several of the free Skype recording tools, but none of them are reliable enough for professional use. One "free" tool erased my past recordings! Other free tools crashed frequently.
The Callburner developer really understands the (fracked up) Windows and PC audio environment. He built Callburner to be both stable and useful.
There are three other components necessary for recording/transcribing.
1. Audio playback software.
Until very recently, I just used the PC version of iTunes. The latest release of iTunes changed the user interface (they simplified things!) after the change, I find it almost useless for transcriptions. In the past I have also used other programs for audio including: Audacity (quirky, easy to forget user interface, but reliable and free) and Cakewalk (reliable, simple user interface).
2. A foot pedal that will work with your system.
Use it to start and stop the playback as you transcribe. (I haven't found a good footpedal setup for Skype-pc yet.)
3. A good headset with microphone.
Choose a good Logitech combo from the recommended units on the Skype site.
Another transcription option I've used is to just send an MP3 file to a professional online transcription service. This is fast and reliable, but I don't get the 'gestalt'' of the interview the way I do if transcribe it myself.
Headset and microphone
This web based tool for transcribing looks like it might overcome need for foot-pedal
Update 5/14: I used Transcribe for a long transcription job, and recommend it highly. It's easy to start and stop the playback from keyboard, and easy to insert timecode in the transcription. You have to install the Chrome browser to use Transcribe. Free for the first week and after that it costs $20 for a year's subscription.