The MP3 Streaming DownSampler for PHP is written with cable modem/DSL users with low upstream caps in mind. Using LAME, it dynamically downsamples a requested MP3 to a bitrate which can be streamed. It doesn’t use temporary files, so you don’t have to take the time to do any batching, and you just give it a directory with symlinks to your music in a place the Web server can reach. The interface is simplistic and fast, meant for immediate plug and play access.

http://freshmeat.net/projects/mp3sds