lame_enc.dll (or LAME Encoder) is the one I use..

You need to make it so you're making at least 128kbps (if not 192kbps or higher) bitrate and 48KHz sample rate, and on hi-res/hi-fidelity settings.. otherwise it's going to blow..

Not sure why you are using Audacity for recording when you can get a full-featured DAW for free. I use it, Superman uses it.. a lot of professionals use it (though they also buy the commercial license since they are making money out of it).. You can get it at:
http://reaper.fm/

It's also only 3.3meg download.. less than your average MP3.. lol

Seriously folks.. this is the DAW to have..

EDIT:

Oh yeh.. with the WAV file.. make it as high a resolution as you can.. 24bit is good.. don't compress the WAV... why would you want to?? That's what the MP3 encoding does..

Get Reaper, put the lame_enc.dll file in the Reaper's installation folder (C:\Program Files\REAPER\ is where mine installed to.. though there is Mac and Linux versions of REAPER on the way if they haven't already been released..) then just render directly to MP3 from Reaper...