Artoonie, I'm not sure what you were referring to with "Awesome". If it was VDubMod, great. You really do not want to be converting formats prior to extracting audio. You will lose some quality. By extracting from the original format it will be as good as it can be.
jjbpenguin, have you tried that with video playing and recording audio? You are correct that Audacity will record all audio but can your hdds keep up with shuttling between two continous applications. Video playback is not hugely processor intensive these days but does require a significant data flow off the hdd.
I can run my pc tv and record audio in an audio app, but the tv is handled by the graphics card and does not impose any significant processor load nor require reading data off a hdd.
If your method can be used, it would be handy for the more bizarre video formats. Another advantage of direct extraction rather than copying is that it takes a tiny fraction of the video run time. 2 hours of video would take 2 hours with Audacity. Direct extraction may take 5 minutes.
Starman*