m3u files are simply playlist files. They don't contain music but are reference files that point to where the music files are.

Your music will be wherever you downld it to. By default this is C:\Documents and Settings\"your account name"\Shared
Unless you changed the location. For fast & easy access, go to your LW Library window, select Saved Files folder & press the Explore button. Sample image here: Using Library Explore button to access downld folder (click on link) & the folder will open up for you.

If your music is all over the place & you have playlists with music from different locations, then it depends on the program you're using to play them. Certainly some will probably give you the option to resave those files or whatever. But I don't recommend resaving mp3 files as mp3's. That will result in a loss of quality.

As far as posting music on a website, it depends upon local laws as to the legal situation; re: hosting copyright material.