If you've ripped your music to a lossless format (ape, flac, etc...) then you can use the convert tool.
1. Select the files you want to convert
2. Select "Tools > Library Tools > Convert Format..."
3. Pess the "Change" button located on the upper right
4. Select "Converter"
5. Check the following boxes
---Update database
---Send original file to the Recycle Bin
6. Select "Encoding"
7. Next to encoder select "MP3 Encoder"
8. Press "Advance" and pick your settings...I would use
---Quality (VBR Encoding)
---Normal, High, or Extreme from drop down menu
("Normal" is OK quality and the smallest size)
---Use Fast Mode
9. Press "OK" on the "MP3 Encoding Options" window
10. Press "OK" on the "Converting Settings" window
11. Press "Start"
Before you start converting your files I would make a test file and rip it using the different MP3 Settings (Normal, High, and Extreme) and compare the sound quality and file size.