On the Amarok website, in the section about getting MP3 support, it suggests that one add the line src/engine/xine/amarok_xine-mp3_install.desktop to the Amarok directory's Makefile.am. I've seen there are quite a few directories for Amarok. Which one would contain Makefile.am?

afaik this is a tip for packagers - those who create packages of amarok for binary distros like kubuntu.

If this is what you use - installing the latest package 1.4.2 at this time) should provide install this file in the correct place, and pop up a message the first time you try to play an mp3.