I am a newbie to digital music, and have just started digitizing my CDs and set up a SqueezeBox Duet. The whole concept -- being able to access all of my CDs from my couch -- is awesome, but the sound quality is not that great. So two questions for the more experienced out there:

1) I have an old (mid-90's) Sony Shelf system that I connected the SqueezeBox receiver to using the analog outputs. The sound coming out of the speakers is pretty distorted, however, particularly when I crank up the volume on the squeeze controller. When I use the stereo's volume control but keep the SC volume setting low, its not quite so bad. Any ideas why this is? I ripped the CDs using Max for Macintosh at MP3 VBR. I have a feeling it is the DAC in the squeezebox receiver. Could it be my old (802.11b) wireless networ?

2) Relatedly, any suggestions for relatively inexpensive speakers (powered?) that I can connect to Squeezebox receivers and get good sound? Do I need an external amp or DAC to get good performance?

Any thoughts/suggestions would be much appreciated.