By default, iRecordMusic searches the following locations, in the order below, for existing copies of LAME:

/usr/local/bin/lame (usual location)
/opt/local/bin/lame (DarwinPorts)
/sw/bin/lame        (Fink)
iTunes-LAME.app/Contents/Resources/lame
NMP3 Ripper.app/Contents/Resources/lame

If you have lame installed in another location, you can select the location in the Preferences. the section called “LAME Encoding”. You can also verify that iRecordMusic has found LAME by checking the LAME Preferences.