Part 1: File Structure
Image tutorial courtesy of @DemonicDax
Part 2: Track IDs
All you gotta do is name the music file after the track ID that it's supposed to replace. (example: vermillion city is 313, so if you want to have All Star by smash Mouth play in verm, you have to name it 313.mp3)
NEW: It is now possible to type the command /bgm while in the game, to get the ID of the track currently playing.
Login Screen (goes in the "2"