I came across this thread because I'm trying to convert MP3's to M4B's to get the bookmarking feature for audiobook MP3's. I tried the NeroDigitalAudio instructions that Alex gave and it worked fine, or appeared to. iTunes says it's an AAC file but MC still listed it as an MP3 File Type. I had expected that field to change, especially since the file extension was M4B. I transferred some of the conversion files to my iPod Nano and it really didn't seem to like them very well. From what I've read, M4B's are supposed to show up in the Audiobooks menu but they didn't and were still in the Music menu. Also when trying to play one, it seemed like the pressing of buttons was buffered instead.
So what's the most reliable way to convert an MP3 file to an M4B, hopefully using MC?