iTunes provides this feature for iPod shuffle. It says "Convert higher bit rate songs to 128 kbps AAC"
i have many 320kbps files and would like to have them at lower bitrate for use on my 2GB iPod (preferably 112 AAC)

Is there a plugin for iTunes which would do this?

I don't know how to do it on the fly. But it's easy to make a 2nd lower-bitrate copy of a file in iTunes:
a) Edit/Preferences, click "Advanced" tab, click "Importing" tab
b) Set Import Using to "AAC Encoder", set Setting to "Custom" and select 112KB, click OK.
c) Select the songs you want to convert, then Advanced/Convert Selection to AAC
d) Don't forget to set import preference back to it's original setting when done.

Dave

but i dont want the extra copy. i dont want my ratings and playcount to be split between high-low bitrate copies.

Unfortunately, I don't know of any iTunes plug-in that allows this. You can use other 3rd party software (I am not sure which ones do this) but I don't know if your playcount and ratings will be transfered over.

IIRC MediaMonkey does this. Also Anapod Explorer.

J River Media Center 12 will do this, maintain ratings and play counts, and much more.

hmmm.. does it update itunes db? nothing on os x which does this sorta thing?