All you have to do is surround the URL path to the mp3 with [mp3] & [/mp3] codes, like this: [mp3]http://mysite/mysong.mp3[/mp3]. If the mod is installed, the [mp3]&[/mp3] will not be displayed (like the other forum codes).
Ah, I see, so your MP3 has to be hosted online somewhere.
Yes. You have to have a direct link to the mp3 file. I was looking around online and I found this site - www.kiwi6.com. They let you host files for free with no signup and give you a direct link to the file. For my site, I let my users upload files to my drop.io account and then I host them on my site. There may be an easier way but that works for me for now.