It hadn't ever occurred to me that the term "convert", as it applies to converting an audio file from one type to another and which is the AppleScript command for doing so, could be construed to mean "replace". Though that's probably why Apple has unambiguously named the menu item in the iTunes Advanced menu used to "convert" a track selection as "Create MP3 Version" (or whatever the current import setting is). It's pretty obvious you get an additional new track and not a transformed replacement.
"Convert" in its "replace" sense, however, is what a number of Correspondents have wanted to do: downsize some ALAC tracks to AAC or MP3, for example, and have the converted versions replace the occurrences of the originals in any playlists.
Convert and Replace will convert a batch of selected tracksor the tracks in a selected playlistusing an encoder chosen on-the-fly (the encoder's current Preferences-set options will be applied) and replace the originals throughout your entire library with the converted versions. Additionally, you can opt to Trash/delete or keep the original files and tracks. (If the tracks are kept they remain in the "Music" library but will have been replaced in all other playlists.)
Possible deal-breaker: newly converted tracks will have a Date Added of "now". There is no getting around this since Date Added is a read-only property assigned by iTunes when a new track is added to its library.
For OS X 10.6 or better.