Cool Edit Pro is a fairly good program. Mixing the channels down does help. 16bit to 8bit conversion would surely help and wouldn't cause that much audible damage.
From there it's just a matter of "taste", whether the audio file is still good enough to use. But that's a personal thing, of course.

Some math:
MP3 of about 3 minutes -> WAV of about 30MB (roughly)
STEREO 30MB -> MONO 15MB (roughly)
16bit -> 8bit 7MB (roughly)

All the math depends on the original file size, of course. So you CAN get acceptable sizes. But still the best way to go is to use tracked music, not MP3.