The first MP3 I ever heard was Gettin' Jiggy Wit It by Will Smith. Please note, I am not the type of person that would ever actively listen to such a song. It was being played in Winamp 0.7something I think. I still have Winamp 0.92 somewhere (single executable).

I think the first MP3s I made was Fantastic Planet by Failure. I used Easy CD Creator 2 or 3 (I think 2) to make WAVs from the CD. Then I encoded them one by one using blade on a command line. No ID3 tags (were they even invented yet?). I remember I filled a CD-R (2x recording ) with MP3s and played it at work with Winamp. I labeled it "The Sh*t" because that's exactly what it was.... The Sh*t.