I have figured out how to use custom soundtracks in WO3.
Yes, it is awesome.

Steps:
1. Find the songs you want
2. Burn them in iTunes as a Red Book format CD
3. Put in Wipeout 3
4. Load a race
5. Wait for it to finish loading
6. Pause when the startup roll starts
7. Take WO3 out and put your disc in
8. Mess with the audio track switching thing under options a little until you find the song you want.
9. enjoy!

PS after the race you have to put the WO3 disc back in to load the menu back so you can go to another race. You can only do this while racing. HAve fun!