Up at the top of iTunes you should see a tab called "Advanced." Its between the tab "Store" and "Window." Click on it, and it opens a drop down menu, scroll down to "Convert selection to MP3." Click on that.... and it will automatically convert it what ever song you have highlighted to and MP3 file from whatever format it was before.
Unless its a "protected' file.... then you can't convert it directly from iTunes.
Of course this is on my Mac.... a PC might be different.
Max, do you have a Mac? You can also go to www.versiontracker.com and find tons of Mac programs to convert files. If I have time later and I remember it I'll see if I can finds some freeware or shareware that does that.
Method 1: Burn the track(s) to a CD, then you can open the CD in iTunes and the Convert Selection to MP3 will do exactly what you want. Just be aware that you'll have TWO copies of that song in iTunes -- one in the original AAC format and one in MP3 format. You can delete the AAC version if you like. (Note that you must burn an audio CD, not a data CD. Check the setting in Edit > Preferences > Advanced > Burning if you have a problem importing tracks from the CD.)
Method 2: If you have lots of music, you might need a big pile of CDs to convert everything with the "burn and rip" method above. That's where the JHymn software can help. JHymn was created to allow you to exercise your fair-use rights under copyright law, and will free your iTunes music from DRM restrictions with no loss of sound quality. JHymn provides a drag and drop graphical interface for both Mac OSX and Windows users. But currently, JHymn will not work with iTunes Version 6 or higher. If you have an earlier version of iTunes, keep it!
You don't have to burn non-protected tracks (ie--tracks gathered from somewhere other than the iTunes store) onto a CD first to convert them. You can convert them outright from your iTunes list. You will still have two tracks, just delete the extra one.
How do you convert from whatever file is downloaded on iTunes to MP3? It makes me nuts that there isn't an easier way to do it.
You may not care anymore about this, but for Mac users one can download or write a script that makes a cd image and imports the song for you, bypassing the need for a physical CD. A windows user could do the same thing I think, but I don't know if there is a windows-native way to create a virtual cd to access. I'd bet soundtaxi is doing something like this as well.