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Open it with iTunes, then somewhere in one of the menus there is an option "Convert to mp3". I'm not on a PC that has iTunes on it at the moment, so can't check, but I think that's right.
Yeah it says M3U Audio Playlist. It'll open with itunes but i want it as a mp3 so i can use it on my phone. When i put it on there at the mo it wont play.