Hi,
This might not be the easiest way, but it will work.
1. Pull your mp3 into itunes.
2. "Get Info" on the file and under "options" there is a place to set the start and stop time.
3. Set the start and stop time for your 1st chapter.
4. Use "Create AAC Version" (You have to set your import setting in Preferences). This will create a .m4a file for the first chapter. Change the name of the file you just created to "Chapter 1" or whatever you wish.
5. Repeat steps 3 and 4 for each chapter.
6. Once you have a file in iTunes for each chapter, use "Join Together" to combine the chapters into an audiobook format. (FYI .m4b is iTunes audiobook format, but it's really just an .m4a file. the"b" just tells itunes to put in under audiobooks.)
Join Together can be found here:
http://dougscripts.com/itunes/itinfo/jointogether.php
