I have absolutely no idea why it works, but it greatly improved both my sound quality and the performance in games (by a HUGE margin). I reduced the hardware acceleration for audio from "Full" to the second-lowest setting.
I have an AMD 900mHz, 256mb RAM, SBLive, Geforce2, Win2kPro, etc...
If anyone has any explanations as to why this works, I'd be interested in finding out. Suffice to say that I've never had any audio problems since I did this.