yeah, unfortunately, the "for name in *" command will separate the input list on newlines and spaces; unfortunately I have found no workaround for this limitation.... even setting $IFS to a newline doesn't do it.
And i think, stryker, that you have your names backwards; your commands find all mp3's and rename them to wav's (not sure how lame would react if it was given an mp3 as the imput and you told it to recode to mp3); shouldn't it be:
or, this might be a little simpler and not have to call sed each time: