last I checked you need to purchase the Roxio program (if you're on a mac that is). It will do ToGo and then convert to an iPod syncable file. Depending on your computer, the conversion can take awhile.
No idea about windows, haven't played with it since the roxio solution came out.
The mac version worked for me perfectly. There isnt a setting specifically for "Iphone", but I used the "IPod" setting and it converted it nicely. The next time I synched with ITunes, it uploaded it without a problem. The instructions on Roxio's site helped me out.