cOrPsE, welcome to the forums.
One thing to try with the Sigmatel driver
, open the Windows Playback properties, select the speakers and click on Properties. Next click on the Advanced tab and from the dropdown box set it to "16 bit, 48000 Hz (DVD Quality)" and see if that sorts the distortion issue.
If that doesn't fix it have a good look around here, Sound & Audio - Windows 7 Forums
and see what if anything has worked for others with the Sigmatel audio.