Itunes 8 can not convert to mp3

I just updated to itunes 8 and now I can not convert to mp3 anymore! The CREATE mp3 version is greyed out and I can not pick it. I have checked and the import mp3 option is checked in the settings.

Howdy!
also, it appears that Apple did not update the "iTunes Help" screens when they made iTunes 8 -- those screens still refer to the "advanced" tab in preferences, even though the importing functions are no longer located there:
THEY READ as follows:
*Choosing import settings*
You can choose the encoding format and other settings that iTunes uses to import songs. Your choices affect the audio quality and size of the song file (the higher the quality, the larger the file size).
To choose import options:
Choose iTunes > Preferences and click Import Settings.
ETC. Well, at least they didn't do an iMove-style "revamp" to iTunes.! 8)

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