Of course it is valid CUE file - cue files can contain different data-modes.
Evolva: Easiest way is to try and burn to virtual cd via Image Recorder. Then mount the CD via Image Drive and save the tracks with Nero. My Nero will freeze though if trying to burn CUE + MP3, so you first need to convert the MP3 to WAVE (with Nero), then open the CUE file with Notepad. Find the line starting with FILE (the 3rd line). It will read something like:
FILE "fileName.mp3" MP3
Change it to:
FILE "fileName.wav" WAVE
Now burn, mount, extract...