mp4 provides same quality as mp3 but at lower bitrates, due to higher compression while still maintaining good quality
the best & legal way to convert mp3 to mp4 is with itunes, only if U chose not to DRM Protect it, so that it can be played in other media players
other methods are
1) Nero Digital : Convert from mp3 to Nero Digital mp4 with Nero CD burner
2) Quicktime Pro mp3->wave->mp4
it is said that a 64 kbps MP4 provides quality comparable to a 128 kbps mp3, although this is subjective, for me 96 kbps provides quality like a 128 kbps mp3, although I use 128 Kbps which provides quality comparable to 192 kbps mp3