If you really need to convert the rm to MP3, e.g. for someone who doesn't use Real player, get the Tara plugin for Winamp. You will need Real Player and Winamp version 2.xx installed to use this plugin. Next, set the audio output mode to Disk Writter and play the .RM song you wish to convert. Winamp will convert the song to Wave on disk (without playing through the speakers). After Winamp stops, set the Audio out back to Wave-out or Directsound. Now, use your MP3 encoder to convert the Wave file Winamp generated to MP3 file. Note that what ever method you use to convert the RM to Wave, MP3, etc., the resulting file will never have any better quality than the original file to start with.
Real Audio plugin for Winamp:
For recording a live band, it is always best to start with the highest possible quality possible, such as a 24-bit, 48/96kHz audio recorder. You can always down convert the recording to anything you like, whether it be 16-bit CD Audio, Real Media, MP3, OGG, etc., but you should always start from a higher quality source. I've seen many use a 24-bit minidisc recorder with a good stereo microphone for recording live bands.