what the use of converting a mp3 to a mo3 that way? the filesize won't decrease, you have to add mo3 support to your game, a lot of extra work... if a game has mo3-support, it *must* have mp3 or ogg support (samples can be compressed), and it probably uses bass.
what you're trying to do looks like zipping a complete cd: hardly any extra compression (mp3, aac and ogg compress a lot better) and more work (unzipping to play it...). mo3 wasn't ment to be used this way, it's to compress mods...
ofcourse, that doesn't help if you want the new top-ten hit in your game
the way you described does work, but that's not actually converting mp3 to mo3, it's, like raina says, putting an mp3 in another stream format.