MP3 to iPod Audio Book Converter
Enter MP3 to iPod Audio Book Converter, which turns ordinary MP3s into iPod-friendly M4B files. When you play those converted files, your iPod will remember your spot and let you adjust the playback speed--just like audiobooks purchased from the iTunes Store. This open-source (read: free) utility requires Windows; the developer says Mac and Linux versions are coming soon.
Note: This program is donationware. It is free to try, but the author accepts and encourages donations towards further development.