I finally got to the root cause of poor audio quality in Froyo when streaming Pandora over 3G. There is an AAC hardware acceleration library that is misbehaving.
This isn't really a fix as much as it is a workaround and it can be done through terminal emulator provided you have root access or you can use root explorer. I only have an OG Droid, so I don't know if this will work for other phones or not.
The library in question is libOMX.TI.AAC.decode.so and it is located in system/lib. Simply rename the file and that should do it. I renamed mine libOMX.TI.AAC.decode.bak.
Since I don't have root explorer, I used the terminal emulator included with CM6.1
1. Set your system partition to read write
mount -o remount,rw -t yaffs2 /dev/block/ mtdblock3 /system
some roms have scripts for this and in my experience it's always been sysrw
2. cd system/lib
3. mv libOMX.TI.AAC.decode.so libOMX.TI.AAC.decode.bak
4. set your system partition back to read only
mount -o remount,ro -t yaffs2 /dev/block/ mtdblock3 /system
some roms have scripts for this and in my experience it's always been sysro
The only negative side effect I've run accross with this is I lost about 200 points on my quadrant score. I'll gladly take perfect audio quality over some number on a benchmark.
Let me know if this works for everyone!