After upgrading to 12.04, I had to reinstall Banshee. As far as I can tell, Rhythmbox does not support on the fly file conversion. Banshee, however, does. So I can keep my FLAC files on my computer, and convert them to MP3 when I make a playlist to my phone.
Rhythmbox does seem a bit more stable, but doesn't do what I need it to. Am I missing something? Is this feature hiding?