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Og(g)re XMMS Output Plugin
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The Og(g)re XMMS-Output-Plugin lets you write Ogg Vorbis files form XMMS. 
Just select the output directory and the desired quality and press play. 
It's that easy. :)

A note on the Quality Settings:
A quality of 3 is the standard also used by oggenc. According to the vorbis 
hackers this compares to a 160 kbps mp3 encoded with the fgh encoder. 
Quality 4.99 should even give better quality while avoiding the big step in 
size at quality 5. Just find out what suits your needs best.
Happy encoding!

And don't forget: Lame is Lame from now on! :)
So use Ogg Vorbis for all your needs! It's free!