The options screen in Amplitude looks like the following:

MP3 Root Directory: This should point to the base of your mp3 collection.
Base Servlet URL: Change this to be the name or IP address of your server if you aren't browsing locally.
Default BitRate: The bit rate used when lame re-encoding is used.

 

If you wish to re-encode your mp3s to stream them over a low bandwidth connection, you can use Lame in conjunction with Amplitude. You must manually edit the configuration file to do this. Open the ...webapps/amplitude/WEB-INF/amplitude.properties file and change the lame.command setting. It defaults to empty. This plays mp3s at their full bit rate. To use lame change the command. Examples are included in the amplitude.properties.lamewin32 and amplitude.properties.lameunix.

An example commandline might be:

lame.command=/usr/bin/lame -h -b %b --mp3input

The %b is replaced by the bitrate at runtime.