Alright, I have had numerous problems with this so I thought I would post to see if anyone could help.
I have recently started using DVDlab (great program) and have been trying to add music to my Menu's.
Now I know that it accepts 8/48 wav, ac3, or mp2 files...Apparently.
I have been encoding mp3s to these formats with no luck, files with lengths between 10s and 1.3min.
I recieve an error message when I try to import to the music tab in the assets bin, that this is not an accepted format.

The only luck I have had so far, is that I was able to encode an mp3 to an ac3 file that was accepted! The only problem is, when I try to play the dvd, the selection cursor resets to its initial location, ie the "Play" button.
Also, the music does not play :-(
The only problem is with the encoding of the files, because I have tried this with the default music files and they work perfectly.
Any help would be greatly appreciated, this is driving me up the wall :-S

An explenation of what software your using all around might help someone to help you.

MP3's can be a problem and best is to convert to WAV and then to AC3. They MUST have a sample rate of 48khz as well. Goldwave is very good for MP3 to WAV, even for 44.1khz to 48khz resampling as well. Then use ffMPEG for WAV to AC3, see the Tutorial section for help there.

I have tried a variety of programs, though mainly Nero and BeSweet.
I had also tried to convert a wav that I had converted from mp3. Though not with the programs you have suggested. I will give them a shot in a few hours, thanks for the help :-)

I encoded the .mp3 file to an 8bit .wav using goldwave, then encoded to .ac3 using ffmpeg. Worked like a charm.
Thanks CM, you the man :-)