Yeah, you want to use the high quality sample rate conversion and also use dithering. Dither adds a bit of low level noise (inaudible, I think) and makes converting from 24 > 16 more accurate.

You should send a private message to Five and AAR.oner (both moderators, you can find their names at the bottom right hand corner of the main technobabble page, then click on them and send a PM). They have used Audacity extensively and should be able to help you out. Then post back here with the solution.