Transcoding
Transcoding means converting a file from one encoding method (i.e. file format) to another. Transcoding can be performed from lossless to lossless, from lossless to lossy, and from lossy to lossy.
Some transcoding tools you can find in the download page.
Special note on lossy transcoding
Every time you encode with a lossy encoder, the quality will decrease. There's no way to gain quality back even if you transcode your 128kbps MP3 into a 320kbps MP3 (or any other high-quality compression).
Transcoding to a lossy format is therefore not recommended, unless absolutely necessary e.g. for portable player use. It will always end up to a worse quality file than the source.
Special note on lossless-to-lossless transcoding
Unlike the aforementioned lossy transcoding, quality will not decrease. Thus you may transcode from one lossless format to another as often as you like (e.g. to take advantage of better compression or better error-correction or better hardware support).
Important note on lossless source files
If you are transcoding to lossy encoding from a lossless source, it is strongly recommended to keep the lossless source files. Thus, if the lossy result is not satisfactory, you can reencode easily.
Note that some transcoding tools have the option to automatically delete source files. Make sure that this option is turned off.