MP3 is lossy, so editing or re-saving it repeatedly degrades the sound. AC3 is what DVD authoring tools, TVs and home-theatre systems expect for surround sound. MP3 is at home in music and podcasts that must play anywhere; AC3 is the usual choice for surround-sound film audio. Both formats are lossy, so the content is compressed a second time; start from the best copy you have.
The defaults suit most files. Under Options you can choose the bitrate and trim the start and end.
This pair uses the compatibility engine, ffmpeg built for the browser, because AC3 cannot be written by the browser's built-in codecs. It is a one-off download of about 10 MB that the browser keeps, it is slower than the built-in codecs, and it takes files up to 1 GB. AC3 is written at 192 kbps unless you choose another bitrate.