3.5" plug audio quality (Touch HD2)?

I encoded some music files with lame to .mp3 (lame --preset standard file.flac) and copied them on the device and.. the sound quality is very bad with extra clicks and pops. I'm running the latest firmware with the new audio player. There seemed to be also three sound files there by default, at least one of them had the same issue.

Anyone got normal sound quality for music using the 3.5" stereo output?