That's actually a setting in iTunes that you can turn on or off. Personally I really like it as it's a convenient way to sort stuff on disk.
As for Aaron's patch, I believe I tried that after the original mp3 converter proved inadequate. It didn't work for me. And that is kind of my point - Cakewalk shouldn't let people jump through so many hoops for such a common feature. It's like if they wouldn't support WAV export but only FLAC. Of course you can use a bunch of tools to turn a FLAC into a WAV and of course a case can be made for FLAC, but WAV (like mp3) is a very commonly used format and clients expect to be able to get such files from you.