I have used both Aaron's mp3 patch for Sonar and Audacity.  I would steer clear of the NCH stuff as you end up with shed loads of ad-ware for their other products in my experience. I usually export at 320 VBR and have had no issues with quality (44.1/16).
Individual track volumes should never exceed 0db in the digital world so -3db is a good max point.
In regards to overall volume as previously mentioned, if it is a final mastered version then peak at no more that -0.3 as a good level. If it is a mix (pre-master) have the overall output volume at between -6 and -3 db which gives some headroom to play with at the mastering stage.
Normally pre-mastering mixes are normally not for public consumption in any case so you would probably only export to mp3 if you want to hear the mix on a cheap reference system that doesn't support .wav files.
Best investment in my opinion is a good metering plug in or application which will give you RMS /Peak plus the increasingly important LUFS (loudness units) or optional K-system.
see Izotope Ozone as an example
 Top of my wish list for Sonar for mastering would be alternative metering (perhaps a pro channel module) which would show the master output in LUFS scale as it would save using a plug in or exporting to dedicated mastering software.
.
 
Hope this helps if only to give you a simplistic answer.

Well said Sven...

Exactly my thinking as well...

FWIW, as I'm only 6 mos into this shindig, I set my levels, mute any unwanted tracks, export audio to a wav file, open it in Audacity and convert to mp3. There are some cool tools to use in Audacity if you still need a little cleanup on the wav file before conversion. This is what I do during the production so I can get feedback.
 
PS - I put our first tune on Soundcloud. You can find it in the songs forum. It's called Son of the South and the drums are a tad hot, as we were changing the kit and checking to see if that's the one, which it is! So if that sounds crap, I need to go back to watching the videos again.

Good stuff, guys. Just soaking it all in and poking around to learn more about the ideas being brought up here.
 
I also very much appreciate that this is sticking to methods and information. I know it's hard to do with this topic but it's really helpful to cut through the subjective crap and just hear how people actually do stuff.
 
BTW... that link that fif4life posted leads to some info on the Mastering for iTunes subject which I wasn't aware of and seems like maybe something I should look into. I don't really/specifically intend to be an iTunes hound but if that method translates well to other lossy formats and keeps me in the realm of nice open dynamic range then it seems worth it to study. Maybe not but it seems at least to be well defined so maybe easier to follow than cobbling together info on other schools of thought.
 
PS: and yeah... I'm totally (or course) trying to get my mixes as nice as possible (aren't we all?) but I do indeed notice Soundcloud making my stuff SLIGHTLY more abrasive so I'd of course like to avoid that. I also need to start paying way more attention to RMS as opposed to Peaks (and gotta figure out how I can hook myself up with some LUFS metering or whatever that thing is).
 
Still watchin' and learnin'. Just popping in to say thanks and it ain't goin' to waste.
 
Cheers.

Look, the initial question was about how to prepare a mix that will ultimately be converted to MP3, and the answer is either:
1. MP3 is so transparent and true to the original mix that no special preparation will benefit the wave prior to conversion with a subtext of
  1a. the idiosyncrasies of the application you use to do the conversion is so critical to the MP3 fidelity that you have to choose the magic tool or your result will suffer . or
  1b. MP3 rapes your mix so badly that it doesn't matter what original mix you transcode it will all be equally bad. 
or 
  2. MP3 results in predictable (though possibly unknowable given the black box nature of the various transcoders) distortions of the original mix which are audible in the final result at least for some bitrates.
 
As a practical matter, those who so deprecate the whole process of lossy compression that they subscribe to 1b., can ignore the whole question. Those who subscribe to 1a can present evidence comparing the various transcoders, which has nothing to do with the OP's question. Those who subscribe to 1. are simply wrong, at least for low bitrate MP3. The OP's question implies that there is an answer that involves at least accepting proposition 2.
 
The issue becomes important in an era in which almost all music is delivered in lossy format, and some at quite low bit rates. Since most of the black box transcoders limit the user to selecting a bit rate, and the online services do not even do that, the logical way to manage the inherent distortion they produce in low rate MP3 is to alter the mix of the wave so that firstly the creation of objectionable compression artefacts are minimized and secondly important frequencies or spatial information is not lost. There are certainly people out there who are working on ways to change the mix for MP3 preprocessing. But if you try to find a detailed explanation of what that might entail you are probably going to be disappointed. If there were a simple answer, it could probably be encoded into a plugin, and if such plugs do not exist I expect they will at least be sold in the near future. Google mix for MP3, and you will probably do as well as you have here so far. It would be useful at least to have the capability of doing real time audio editing and have a low latency feed of on the fly converted MP3 into your monitors, so that you could use your ears without having to remember a sound before and after rendering. People who are mastering for the lossy world of the present, are going to have to train their ears, if not their intellect, to how their chosen transcoder screws with their original mix, and how they can compensate, as they did in the transition from vinyl to CD. Or they can just accept the results they get. 
 
http://www.justmastering.com/article-mixingformp3.php
 

I have been using the LAME encoder in the NERO Wave Editor. It is free to download from their website. I started using that process when I was doing voice overs and had not yet upgraded to SONAR (Music Creator). The agent I was using wanted a specific level limit and a specific bit rate for their MP3 demo files. The work was pretty much finished before export.

I export a 24bit/44.1k WAVE file, then open it in Nero Wave editor, set the normalization to what the company wanted then save the work as the MP3 file with the settings required by the agents.
It isn't the fastest way to do things, but it works.
I still do it today - that whole familiarity/contempt thingy.

slarta cuttin' to the bone! Heheh. I am most definitely approaching this from paradigm #2 (that lossy CAN result in degradation of quality and that degradation CAN be avoided if certain procedures are taken).
 
I'm certainly not saying that sometimes it is not a factor (like the ultra nice mix scenario) but that in the cases where it is a factor (like my congested dum dum mixes... which I'm trying to get better at) that I'd like to have strategies to avoid the degradation.
 
So it's one of those situations where to solve/avoid a problem you need to UNDERSTAND the problem which I don't (but thanks to all the great info here I'm starting to get my foot in the door on it all). In this case it seems, as I suspected, there is no "one size fits all" solution so it becomes even more important to understand the causes and possible remedies.
 
That becomes even more important in my case I think because my music (and how I like it to sound) is probably outside the "norm" of what most people are doing... AND even though I'm currently futzing with one particular style at this point (super layered/distorted/busy material with not a lot of room for the digital compression to work with... which is something I've learned as a result of this thread) I also want to/need to/will work with many other styles that may be more open/dynamic/easier to compress (like light ambient or acoustic stuff) or the exact opposite (approaching "Black MIDI" insanity).
 
And yes... this does all need to be done in a way that will play well in the new age of digital distribution. I'd love everyone to listen to my stuff at 24/48 at all times but that ain't gonna happen 95%+ of the time.
 
Someone earlier asked about plugs that can maybe duplicate the effects this type of digital compression as something gets mixed. If such a thing exists I would be interested (although I'm sure anything like that would be super expensive mastering tool stuff). Like toss the bugger on the Master bus in a mix project and be able to emulate the effects of compressing to mp3 at various qualities and other lossy formats so I can mix for ALL formats.
 
I have just recently put my VRM Box through the ringer on a recent mix testing my work at every stage to see how what I'm doing responds to the various room and speaker emus. I like that workflow because it exposes a lot of nastiness I could not hear before and I think it has really helped. If something like that were possible for various compressed file formats I could see it being really useful and could take a lot of guess work out of all this.
 
We've got bit reduction plugs (that are more for effects) so maybe the sample yanking properties of digital compression can be emulated. I'd imagine it would have to be a SUPER heavy duty lookahead tool but yeah... I'd like that.
 
Maybe this is the type of thing the Izotope (and similar tools) are capable of.
 
That's totally off track though. This thread has been awesome for giving me things to try and research... and yes... I DO overthink things. I don't view it as overthinking though. I view it as learning about the craft I love and making it so I can get sh*t done the way I WANT it done instead of struggling with simple crap.
 
Thanks again.

Yo, Beep!
 
I've struggled with the whole mp3 thing for a long time... skimmed all the above, will definitely read the soundcloud article more carefully (bookmarked it).  It's all way too techy for me... suffice it to say that in the past I've always ended up with weak mp3's, whether using Sonar's, Goldenwave, or a couple others...tried all sorts of "higher levels per track" or busses or master... different settings... blah blah blah... but only recently have I hit on what works for me, despite reading stuff on this a number of times...
 
My mixing has improved greatly along with acquiring better tools (mostly Fab these days) but the biggest real impact on the sound of my mp3 uploads to soundcloud or soundclick was a simple purchase:  IK's Stealth...While Pro-L helped, Stealth really caused me to change everything.  Maybe its it's simplicity, I don't know...
 
After a bit of playing around with it, I've ended up backing off all individual channel levels on every remix, being careful to feed the master levels barely into the red... Stealth converts this into impactive hi level mp3s with no distortion... maybe it's the intersample modulation limiting, I really have no idea... but after years of bland or oversatuarated mixes, things are starting to glisten and levels are far better...much louder now, all the way to my uploads...I realize this is totally outside the focus of this thread but it is how I arrived at a smile...
 
I guess I should also mention that simultaneously, along the way, I've been listening to lots of the studio album Rush mixes and realized how open and uncluttered they are...and how much I liked them... So I also have been focusing on clearing out my own... clutter becomes crap and with all the toys these days... crap is easy to pile on...
 
Then there's the Pro-Q2 for making space for different things without oversaturating particular frequencies... 
 
I guess for me, the road to better mp3s has been in better mixing then finalizing with Stealth...
 
Sorry if all I've said is a bit off topic...

Not at all, Vast. That's quite helpful and I'll take a poke at that plug. Like I said I have (or had) no idea where to start researching. Now I'm cobbling together a muddled path forward. Before it was all googling "durrr... how maik mparTHREEVES sound teh gooderer... hurrr?!". Now I've got some reference points/keywords to start with from people who have actually had some luck with it all.
 
THanks.

And really just knowing the names of certain programs and reading up on them leads to a lot of useful info. I've always found that to be the case with anything audio related. The manufacturers want you to by their stuff and kind of expect you to know what you are looking for so when they brag about their goodies they reveal useful tidbits about WTF it is they are doing (which sometimes can be done with brute force sans the software).