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OK, this is just lame, and I don't mean the software. Following a post by /merrikson/ on amarok forums, I had to edit the mp3 profile in
~/.kde/share/apps/amarok/scripts-data
so that it read
[Amarok TTMD - mp3]
encode_type=FAAC
extension=m4a
naming_scheme=/tmp/kde-bremner/transkode-%{artist}-%{title}.%{dst_ext}
show=false
switches=-q 100
Now amarok thinks its transcoding files to mp3 for my ipod (why do people want this?) but is really using m4a. I've submitted a feature request to make this less lame.