will i be able to convert my song files with songbird?

Much like ripping/burning tools, there are other applications that can handle this quite easily. For windows you have dbpoweramp and OS X has the redoubtable Max (www.sbooth.org/Max).

I enjoy watching people slag iTunes for being bloated, only to turn around and request that everything, including the kitchen sink, be bundled into Songbird.

gStreamer, the new and improved audio core in Songbird, is capable of a lot of things such as: extensible media playback, network streaming, and format conversion. Consequently format conversion shouldn't be too difficult to implement in the future. (Also, check the roadmap and do what Boris already said to do)

If you're worried about bloat, how about implementing this as an add-on?

Create an add-on for converting media files. Those who want the feature can use the add-on. Those who don't, won't. CD ripping can either be implemented into the same add-on or have a separate add-on. (I'd personally prefer implementing it, since CD ripping is a file conversion of sorts).

It would be an ideal way to implement the feature because most (if not all) media players which offer file conversion and CD ripping support also offer the option of disabling the features.

A nice add-on idea might be to implement the LAME encoder, similar to the iTunes-LAME script found here: http://blacktree.com/?itunes-lame