Did you know that the iPod is supporting two additional audiobook features ? Audiobooks in the m4b format support the adjustment of the reading speed and pointers to the last reading position of the audiobook. Those features are not available if your audiobooks have the extension mp3.
It is however possible to convert your mp3 audiobooks into the m4b format to enable those two features. Another advantage is that audiobooks are normally available as many small mp3 files which will be merged into one big m4b file in the process. You can use the Open Source program MP3 to iPod Audio Book Converter to make as many conversions as you like.
Once installed you simply add all parts of the same audiobook to the list of mp3′s that will be converted. Make sure they are in the correct order, it would not be that nice if the playback would jump around in the chapters because of this. It took about eight minutes to convert the mp3 files of one audiobook CD into one m4b format.
The output size was a little bit astonishing. The original mp3 files had a size of nearly 100 megabytes while the new m4b file had a third of that file size. 34 Megabytes instead of 100 Megabytes was an incredible reduction without noticeable loss of quality.
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This should do the trick to convert the mp3 files to audiobook: http://www.theblogaholic.com/2011/02/05/convert-mp3-to-audiobook/