questions about conversion/recording software

[nomadbeatz]

I'm a Live 4.0 Mac OS X user -

I'd like a suggestion on the best (most functional working with Live 4.0) and cheapest (free if possible) type of software to use to:
- convert songs that are mp3s or whatever type of file, to the appropriate file type with the correct file extension and type of compression, for Live to be able to recognize it, in order to bring it from my HD library into a live set. I'm not sure how many different file extensions Live supports?

- recording software - in order to take a finished piece that i have made in Reason 3.0 together with Live 4.0, and record it from my laptop (without any external devices) and convert it into an mp3. I have downloaded WireTap Pro which has succeeded sometimes to accomplish this, but sometimes i get a message from Live when I'm trying to drag this into a clip slot, that it doesn't have the appropriate type of compression.

What type of compression do I need to use?

thanks

nomadbeatz