MIDI-files are just control data, you need a synth to re-create the music that the MIDI information describes. The QT GM synth works OK.
You'll need to get the MIDI-file connected to something like Reason or Logic, set up the sounds and the mix you want, and then bounce the AUDIO output of that package to an .aiff file.
You can then throw that at iTunes and burn your CD, redbook, MP3 or otherwise.
You won't get far just sticking the MIDI-file into iTunes.