The conversion itself has been explained many times before (just search the forums...). However, Jazz2 will simply refuse to play any music files that big. The limit is somewhere around 2Megs. However, even then the game sometimes locks up because of the filesize. E.g. the level plays fine but when finishing the level Jazz2 will lock up.

And yes, it can be done. You can decrease the filesize so that it'll be acceptable but you'll get a very low quality (I don't mean "bad" quality, just very low compared to the original file). So it IS possible, just NOT recommended.