So let's try this again since trying to get you to fix the problem with installing a better update than the OTA isn't an acceptable alternative.
Are you running Slacker free or the paid version? The free version is highly-compressed music that will be clipped on both ends to conserve bandwidth. This is a problem with any MP3; the compression is very smart but it does eventually start cutting into quality. I imagine, based on my subjective testing, that the audio is compressed to a bitrate of about 96 whereas a CD (which itself often sounds a bit cold and sterile compared to an analog recording) is 320. Pump that out to a high-quality stereo and an audiophile will notice. Headphones, maybe not so much.
If things sounded a lot better on 2.1 then it might be the new stagefright codec or whatever the heck it's called. I was reading up on it in another thread with a Pandora issue (totally unrelated) and it was reported that changing or uninstalling the codec improves sound quality. In the same thread it was reported it didn't, but YMMV if you want to try it.