Can I Choose to ONLY Sync MP3 Format?

You can create a Smart Playlist that excludes the wav and aiff files.

Yes, it will be an enormous Playlist, but you're simply using it to put things onto your iPod, that's all. Once the songs are on the iPod (due to the"enormous Playlist") you do not have to use or access that Playlist. You simply navigate to the same menus as before.

Try creating the Smart Playlist in your iTunes Library so that you can see what it does. If you like it, then you will need to change your Sync options from Sync Entire Music Library to Sync Selected Playlists etc... and choose that Smart Playlist.

To create the Smart Playlist, click on the big + button in the lower left corner of iTunes and select New Smart Playlist. Set it to look like the one below, by changing the drop-down menus and choosing the option shown (i.e. Kind and contains), and also typing in the text shown in the white text box (i.e. mpeg audio and aac audio):

Important - the following changes also have to be made, or the Playlist will not work.:

• Click on the ... button marked 1. to create a new line in the Playlist rules. The new line will be the any/all of the following rules and also the drop-downs below it.
• Click on the drop-down marked 2. and change that to any.
• Click on the + button marked 3. to create the additional rule line. Make sure you click on the + button in the line that now reads "Kind contains mpeg audio".

Edited to correct instruction error.

You can also select to sync everything and have it automatically converted to 128, 192 or 256 kbps when it is synced.

The original remain untouched in iTunes.

Select the device in iTunes and click the Summary tab.Tick Convert higher bit rate songs to (select 128, 192, 256 in drop down) AAC.