BSEditor: Got a lot of audiobooks in MP3 format and would like to listen them on your iPod? Audiobook Binder
to the rescue! It is a simple utility that converts audiobooks to MP4 bookmarkable (m4b) format.
If you're a command-line guru we have CLI version for you. If you prefer GUI - there is Cocoa version. And it's absolutely free. Moreover it's open source. Grab sources and start hacking.