Just because the transcoder is ticked in Subsonic doesn't mean it will just work because subsonic doesn't do the transcoding itself.
ffmpeg must be installed (see
http://www.subsonic.org/pages/installation.jsp#mac) I'm not sure where the MAC OSX install expects to find the ffmpeg & lame binary though.
Look at the log in About (web interface) or subsonic.log in your subsonic directory and look at what happens when you try to do a aac > mp3 transcode.
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