This case was not really considered.
Until this is fixed, you should use the command line:
vlc $SOURCE --no-sout-video --no-sout-spu --sout
"#transcode{acodec=mp3,ab=128}:standard{dst=$DESTINATION,mux=raw}"
** Changed in: vlc (Ubuntu)
Status: New => Confirmed
** Bug watch added: VLC Trac #3681
http://trac.videolan.org/vlc/ticket/3681
** Also affects: vlc via
http://trac.videolan.org/vlc/ticket/3681
Importance: Unknown
Status: Unknown
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vlc fails to properly convert movie to mp3
https://bugs.launchpad.net/bugs/550599
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