Yes. It is possible to import music from YouTube videos into GarageBand. That is, if you're willing to do a little file conversion to get there. There are applications that you can find that will assist in this process, but I don't go through the process often enough to need one.
Here's a link to one that you could try:
http://www.mac-dvd.com/mac-youtube-downloader.html
Here's How I Do ItGarageBand seems to prefer either MP3 or AIFF files, so that's the goal. And, YouTube videos tend to be in FLV (Flash) format, so that's what I'll use to start the process.
Download a Flash video from YouTube:
1) open RealPlayer on your Mac (you might have to download and install it first)
2) in RealPlayer's Window menu, choose the item named Open RealPlayer Downloader
3) in your browser, open a YouTube video's page, and it will start loading
4) RealPlayer Downloader will automatically start downloading the video as it loads
5) click the Download link in RealPlayer Downloader after it's finished downloading
6) click the View Downloads Folder to see the FLV video file saved to your computer
Convert the video to AIFF:
1) open the video with QuickTime Player
2) from the menu bar, choose File:Export
3) choose Export:Sound to AIFF
4) click the Options button
5) change the settings to Linear PCM, Stereo, Recommended, Normal (or better), and 16 bits
6) click OK, then Save to create the AIFF
At this point, GarageBand might be able to read the AIFF file. Test this by opening a blank GarageBand document, then drag the AIFF onto the blank GarageBand document to import it. If this doesn't work, continue with the next step in the process to convert the AIFF to MP3, and import the MP3 as described here.
Convert the AIFF to MP3:
1) drag the AIFF to iTunes to import it
2) from the menu bar, choose iTunes:Preferences
3) from the General tab, click the Import Settings button
4) change the Import Using to MP3, and OK out of the two dialogs
5) select the AIFF in iTunes
6) from the menu bar, choose Advanced:Create MP3 Version
(or right click on the AIFF and choose Create MP3 Version)
7) from the menu bar, choose File:Show In Finder
(or right click on the MP3 and choose Show In Finder)
8) import the MP3 into GarageBand as described in the paragraph above
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