How do I burn MP3 files to CD at a lower bitrate?

I'm a newbie to Mac and to iTunes, so pardon me if this is a frequently asked question. As a former user of Windows Media Player, I am used to being able to burn my MP3 files to CD at a lower bitrate (128) than what the MP3 files saved on my computer are (320). In WMP you tell it what bitrate you want the files encoded at, it then re-encodes them, burns them to CD and then deletes the re-encoded files from the hard drive.
Am I missing something in iTunes or is this not possible? It looks like I might be able to do each step of these steps manually, but I'm not quite sure how to save the converted files to a different folder than the originals. If this is not possible in iTunes, can someone recommend a program that will do this. Thanks!

You can easily burn them into artist folders onto the CD (which is not what you previously asked).
Create the playlist.
Sort on Album or Artist and then burn it.
The songs will be put into Albums or Artists.
http://docs.info.apple.com/article.html?artnum=60931

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