You said "bias it to 2.5V with a couple of 10K resistors, and then AC couple into that with your audio source"
How exactly do I do that?
There is a schematic on [u]this page[/u]. The two 100K resistors form a 50/50 voltage divider that puts 2.5VDC on the input. The 10uF capacitor isolates the DC bias from the audio signal (while allowing the audio signal through). In most cases you can leave out the 47nF capacitor.
The bias allows the Arduino to read the negative-half of the AC audio waveform. (You can subtract-out the DC bias in software, or it's easy to ignore if you're using FFT data.)