click the edit menu and follow this:
preferences > general
(look too the bottom for "when you insert a CD" and select the drop down menu and choose what you wish it too do, than click the "import settings" and select MP3 Encoder and bit rate. (for when you are loading CD's).
if you are trying to take a song already on your computer and make an MP3 version of it it should simply be a left click on the track(s), than a right click for the menu from there select "Create MP3 version".
if this is not working for you, than i'd be curious to know what file format your audio is, and i would point you toward an audio conversion software.