How do you convert mp3 to m3u format?

Short answer: You can't. mp3 is a music file format, m3u is a playlist file format.

What this means is that m3u files are plain text files that contain a list of mp3 (or other music files) to be played. They are typically created by winamp or other media players.

Have a look at http://hanna.pyxidis.org/tech/m3u.html for a full description of the format of the m3u playlist.