My two cents on this since I just converted the 17 disc Harry Potter to bookmarkable AAC. I used iTunes 4.9 to rip the CDs using the new Podcast "optimize for voice" preset. NOTE: Bigger files are supposed to be more skip prone
http://docs.info.apple.com/article.html?artnum=93318 and eat more battery life due to the way the hd & cache are handled so I kept my files to single chapters which were about 40 minutes each, encoded at 64kbps.
I used "Join Tracks" to gather each chapter into an individual file), but a few chapters were spread over 2 consecutive discs and I wanted to combine them, so I used mp4box
http://gpac.sourceforge.net/ (Windows, Linux, but not OS X) to losslessly concatenate the AAC files. I then manually used a hex editor to change the file type from "M4A " to "M4B " and changed the file extension from .m4a to .m4b and changed the genre from "Books & Spoken" to "Audiobook". (AFAIK the rename trick only works on Windows, while the hex editing also works on OS X) Created a Smart Playslist for the whole set of files and enjoyed.
A few more possibly useful links MarkAble
http://www.ipodsoft.com/index.php?/software/markable (Windows only) is supposed to help automate the process I went through, but I'm not sure how it concatenates the files and wanted to learn, and the aforementioned Doug's Applescripts
http://dougscripts.com has Join Together (OS X only), but that requires QTPro and it is still not clear whether this is a lossless concatenation or not.