I find the command line documentation a little overwhelming, given that I know almost nothing about codecs and the like...
So the following is exactly what I'm doing in VLC (1.1.11) and it would be great to know what the exact commandline equivalent of this would be.
Media -> Convert/Save
then I add the file and click on Convert/Save
add the name of the destination file
and in Settings -> Profile
I select "Audio - MP3"
and click Start