Ogg Vorbis is a completely open, patent-free, professional audio encoding and streaming technology with all the benefits of Open Source. The compression is much better than MP3 resulting in smaller file sizes.
dbPowerAmp is one of the best tools out there to convert from one format to almost anything. You can also get codecs for just about any format out there to convert to. Just about all formats is covered. It is also freeware.
dbPowerAmp Music Converter