How do I create a Kindle and iPod-compatible audiobook file with section markers?

The Audible format is a DRM protected proprietary format only available from Audible. They protect their format diligently. From what I understood, they used to charge handsomely for the right to use it. I am not aware of any publicly available encoders that will create audible formatted files (for free or not). Since Amazon bought Audible I am not sure if they would even sell the right to anyone else anymore.

I do not own a Kindle, but from what I can tell, it only supports Audible formatted files with full audiobook functionality. MP3's can be played , but they are not treated the same way (no support for chapters etc).

Creating audiobooks with chapter support for the iPod requires creating a M4B file with a text track and making sure the audio track has the proper track reference to the text track. M4B is a version of MP4 that uses AAC audio. There are several programs to do this on the MAC and recently a few have surfaced for the PC.

I have created a freeware software package with a Graphical User Interface (GUI) for the PC which is in Beta test now. It is called "Chapter and Verse" and it will be available on lodensoftware.com shortly. Two other options with GUI's are: "Chapter Master" from Rightword Enterprises ($15) and "iPod Audio Book Converter" (freeware) from sjhaley.com which is in Beta test as well.

Several command line utilities exist as well. One is called Slide Show Assembler (SSA) that can be used to create podcasts as well as audiobooks. SSA is available from jrlearnsmedia.com. Another is a command line utility for manipulating MP4 files called mp4creator. mp4creator can add chapters to a MP4 file.