Can you recommend me a freeware audio editor for saving to MP3 or iPod format?

you could try Audacity. If you are actualy tring to make the beats yourself, you can try these:
LMMS: http://lmms.sourceforge.net/
Acid Xpress: http://www.acidplanet.com/downloads/xpress
Mu.Lab Free http://www.mutools.com/products.html
Zynewave Podium Free http://www.zynewave.com/