I agree with jhd3rd. I don't have any problems playing mp3s using a share. Right now, phJuke is probably the most important application I run on my Audreys.
Most of the time I'm using Audreys with limited hacking. Not much more than the shell hack, mounts, ped, etc. I'm using the original browser to connect to HomeSeer to control lights, check temperatures, etc.
I have no network related problems. The path between the server and my furthest Audrey:
server (Celeron 950, 5400 rpm 40G drive)
7 foot cat5 cable
5 port switch
15 foot cat5 cable
Linksys router/4 port switch
50 foot cat5 cable
8 port switch
60 foot cat5 cable
I don't have any problems with this and it's definitely not a short, simple connection between the machines. There are other machines hanging off each switch and a wireless access point thrown in for good measure. I don't think cable length is an issue.
I think the encoding of the mp3s is worth looking into. I have not played around with different methods. Almost all my stuff is ripped from cds using MusicMatch at only 160K CBR. Not what most audiophiles would like, but I'm happy with it. I can experiment with higher bit rates and see what happens.