Hello,
First you need to convert the audio on the CD into MP3 format (which you already know). Basically this is called Ripping. If you are using Windows you can actually use Windows Media Player to Rip the audio into MP3s. Here is a link with step-by-step instructions on how to do so:
http://www.microsoft.com/windowsxp/u...ted/ripcd.mspx
Once you have the audio in MP3 format, you can edit the gaps using audio editing software such as
Audacity (Mac or PC) or Garageband (MAC). I tend to use Audacity and find it to be a pretty powerful program (oh and it is Free

).
You are correct in that iTunes has podcasts and they can certainly be indexed, but you can host and stream podcasts directly from a web page or blog. If your client wants people to be able to subscribe to his/her podcast (which is always suggested) you will also need an RSS Feed. My suggestion, start with getting the audio cleaned up and getting it online so people can hear it. Then get the RSS feed up and running.
To get a podcast streaming in the simplest form here is what you need:
1. Audio
2. Web page or blog to host the audio
3. Podcast Player so people can hear the podcast or a link to the audio on a website or blog (like this
http://mypodcastharmony.com/avp/).
5. RSS Feed (something like this would work:
http://rssfeedgenerator.net/)
I just posted Episode 9 of my podcast called "Podcasting 101" here on the forum. Listen here:
http://www.virtualassistantforums.co...7418#post64552
I provide some information on what a podcast is and how to get started. That may help you out too.
If you have any other questions, just ask.