How do I convert an aa. file to a more suitable format so that I can listen to my audiobook in my iPhone?
Most AA files are protected by DRM, if you want to convert them, the general mp3 converter can't deal with it.
You can try the Audio Book Converter (http://www.macsome.com/audio-book-converter-mac/index.html), which supports converting any audiobooks to MP3, AAC for your iPhone, so you can play MP3 anywhere and anytime without any limitations.
You could try AA to MP3 Converter from http://www.any-audio-converter.com/aa-to-mp3-converter.php. Alternatively you could simply download the Audible app for the iPhone (http://www.audible.co.uk/wireless/iphone).
if it is DRM protected AA files then you need to remove the protection with software like tunebit
or to remove DRM protected AA files protection by recording from your sound card using direct sound recording software like freeware sound editor Audacity.
Any Audio Converter