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Convert mp3's to m4b with chapters

I just bought an Ipod Classic, and am trying to use the audiobook feature. I have several mp3's that I have converted into a single m4b, but I would like to be able to skip between chapters (mp3's) on the Ipod. When I click the forward- or backward button it only skips 'til the beginneing or the end.
Is there any way to do this? Preferrable a freeware conversion program, but a commercial one will do as well.

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First, you will need to convert the MP3s to AAC.  You can do this in Itunes by highlighting the MP3s, right clicking and selected CREATE AAC VERSION.  

Then, you can either go to your MY MUSIC folder and manually rename them to m4b, or you can use the following software:


rayvesAuthor Commented:
This is the software I used to convert the mp3's to a single m4b file and it works like a charm, but I'm not able to use the forward- and backward button to skip chapters (mp3) within the audiobook file.

Is there any way to make my Ipod able to do that, or is this as good as it gets?
To be honest, I've never used this software.

The way that I do it (and I'm an audio book nut) is I convert all the MP3 files to AAC through ITunes and then manually rename each file to m4b.  This way you still have individual files that you Ipod recognizes as audiobooks.
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