Moderately, sort of.
Be aware that if you convert the file from one lossy compressor (mp3) to another (AAC, which is what m4b uses), you may well lose some quality, although people's view of comfortable reading quality may vary. Also be aware that if you're converting audiobook ripped tracks from CD one by one it isn't worth doing, because there's no great point in having a bookmark in a 3 to 5 minute track.
Look up the software MarkAble, which costs $15 from www.ipodsoft.com and has a short trial period. This will "stick together" track-by-track mp3 audiobooks into longer files and convert them to m4b.
If you have any long mp3 files (saved in CD-length, chapter length or whatever) these can be converted easily in iTunes, or even used directly with bookmarks: iTunes 5.0 has a setting for 'remember playback position for this track'.