Not to beat a dead horse here, but I'm having the same problem. I just got an MP3 player that I thought came with its own software (turns out it came with MusicMatch that is no longer available for mac) I tried converting my iTunes library to mp3 the way you said. It did a whole bunch of processing but when I look on my hard drive, my iTunes folder is still full of .m4a files and the converted .mp3's are nowhere in sight. Now that I know how iTunes works it is easy enough to import audio cd's to .mp3's with the import preferences set to mp3, but I still can't figure out how to get my existing library over to .mp3 to get it onto my mp3 player.