Oh, 1 more thing; RB will want to Merge to a (temp) Wav file first, then convert to the compressed format.
Form your screen shot:
Try clicking OK and let it do its thing.
Once it merges to WAV it asks for the compressed format.
My gripe with this is that it leaves a 0KB size WAV file in the RB folder.
It doesn't take space but messes with the file list.