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I don't know about the MD bit, but I have successfully converted tape to wave files (which can then be converted to mp3 if you wish) using a Terratec Phono Studio Pre-Amp USB. This allows either tape or vinyl to be recorded onto the PC, at the same time allowing for some impressive tinkering with the analogue signal to improve the quality. It can remove scratches and clicks from vinyl / taped vinyl originals, and hiss from tape, etc.
You can get one for about £50 (e.g. eBay).
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