iPhone likes CAF (Core Audio Format), but how do you create or convert to a CAF file?

1) Use the afconvert tool from Apple. This is a command line application that you need to run from the shell prompt. Example:

afconvert -f caff -d LEI16 myAudio1.wav myAudio1.caf
afconvert -f caff -d ima4 myAudio2.wav myAudio2.caf

Documentation: http://developer.apple.com/mac/library/documentation/Darwin/Reference/ManPages/man1/afconvert.1.html
To batch multiple files, I have found it useful to write a batch file

2) Alterativey,

I use the free audio editor Audacity, which can be downloaded from: http://audacity.sourceforge.net/

Note, that version 1.2.6 does not export to CAF, but 1.3.7 does (caveat: it’s currently still in Beta).

To convert to CAF, do File->Export.  Select Other uncompressed files, then click the Options… button.  Another dialog will pop-up where you can select CAF (Apple Code Audio File).

Link to CAF specification: http://developer.apple.com/documentation/MusicAudio/Reference/CAFSpec/CAF_intro/CAF_intro.html#//apple_ref/doc/uid/TP40001862-CH203-DontLinkElementID_60.

Note

Using afconvert seems to be more reliable.