Wish I could help you, but I just use CDex to put Wave headers on my MP3's for making DivX movies. My setting on the encoding page are:
Mode: Stereo
Encoder: Lame MP3 encoder version 1.29, Engine 3.92
Quality: Very High Quality (q = 0)
VBR Method: Disabled
Bit Rate: 128 kbps
Output sample rate: 48000
You may just need to increase the bit rate to improve the sound quality.