I use
WaveMP3 to "convert" MP3's. This tool makes it very simple to do so, as you can simply drag and drop your files.
You may notice some MP3's don't play, they'll leave an error in the IL2 console and get skipped over.
I had a large number of files with this problem, and as it turns out they all have one thing in common: They are encoded in "Joint Stereo" instead of regular stereo.
IL2 cannot handle the former, so you will have to re encode your MP3's.
Audacity can do this, though it's a cumbersome solution.
Encoding MP3 to MP3 will result in sound degradation. Though the engine noise in flight should make that largely irrelevant.
Note that files will be played in alphabetical order. IL2 can theoretically play in random order, but that function doesn't actually work.
You can however skip songs in flight by opening the console and typing "music PLAY STOP".