Resurrecting an old thread, but I figured it may be better than opening a new one. :)
I have run into the same problem. The source WAV file's details are "PCM - mono - 16-bit - 8000 Hz". It fails to convert to OGG. I can send the file per PM if it's a bug and not a case of me missing the obvious (quite likely, it's just my third day with C2!).
(edit: I PM'd you the file, Ashely. Saves a step if it's a bug.)