I had thought it would be easy to do, before I started working on Orecchiette. However, it has problems -- for one, compressing audio into mp3 is apparently a lot more computationally intensive than other audio storage formats; I'd prefer not to load down the device too much while using it as a phone as well. For another, I don't recall even finding an mp3 encoder in the list of available Gstreamer plugins for the N900. (I'm using Gstreamer for all the audio I/O in Orecchiette.)

I'll take another look, but I doubt it'll be possible.

(Interestingly, it looks like the Android platform only officially supports encoding audio into AAC and WAV as well. Dunno about iPhone or WP.)