The best way I've found to post audio files (such as MP3s) to WordPress.com sites is to upload the files to the Internet Archive, then link to them from your WordPress.com post. The Internet Archive offers free media hosting, with no file size or bandwidth limits, as far as I could find. You could also use any host of your choice; the process for posting to WordPress.com will be the same.
WordPress.com supports an audio shortcode that will embed a simple Flash player in your post. I don't believe the self-hosted WordPress (WordPress.org) supports shortcodes, so check out the Blubrry PowerPress plugin instead.
Select the audio file from your computer, then click OK. You can select multiple files by holding Ctrl and clicking each, or holding Shift while highlighting them.
The upload page will appear.
A progress bar at the top will show the upload progress.
Fill in any relevant information about the audio file.
When the upload completes, click the Share my File(s) button at the bottom.
The next page will say Your Page is Ready! with the link. Click the link.
In the Audio Files section, find the MP3 link. Right-click the link and copy the link location.
Finish typing the body of your post. You can switch the tab back to Visual if you’d like.
Finish the rest of your post (title, categories, etc.), then click Preview Changes. You should see the Flash player and a Download link.
When everything looks good, return to your post and click Publish.
Your published post should look like this, with the embedded Flash player and live download link. Visitors to your site can stream the audio file or download it for later listening.
WordPress.com automatically generates an RSS feed of your posts, which people can subscribe to. They should be able to to stream or download within their RSS reader. Here's what this post looks like in Google Reader:
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