Just spotted this thread - been busy this week.
My method for creating MP3s using MPEG Streamclip and iTunes..... Fiddly but free
Open the file in MPEG Streamclip (the beta is aimed at Snow Leopard, the other for earlier big cats).
Go to File/Export Audio. As mentioned, there is no option for MP3; I export to AIFF which I'm given to understand is lossless so at least the quality should stay the same.
If you want to do any editing of the AIFF you can use your favourite audio program
Otherwise, drag the AIFF file on to iTunes icon and it will load it it in, still as an AIFF (which will be a relatively big file, but suitable for burning to standard audio CD);
In iTunes Preferences - go to Import Settings button/Import Using - choose MP3 from the Dropdown and choose from three standard settings. Or use Custom which opens up more options. Then close the Prefs window.
Now go back to the main iTunes window and highlight the file or files you want to convert; go to Advanced and you now have the option to Create MP3 Version. A greyed out version of the file will appear and stay greyed out until conversion is complete. You can highlight several files, but it will only convert one at a time. Be patient - it may take a while, depending on your setup, but you'll get a chime when it's finished.
Voila! - MP3!