NEVER EVER put anything other than a phonograph (a record player, those funny black disks that are about 12 inches wide) into a phono input. these inputs have a preamplifier and will distort anything.
Here's a simple lesson on audio equipment.
Ground loops are evil, any good audiophile will run a ground wire from device to device.
Phono is for Phonograph... if you dont know what it is dont plug it in there.
Computer equipment is NOT high end audio equipment.. you need audio equipment to make it work right.
Isolation transformer patch cords are your friend... buy one at radio-shack NOW.
turn on your cdplayer, play something and then switch back and forth balancing the audio out of your
player to MATCH that of your cdplayer. setting it higher than the other components doenst make it louder it makes it sound crappier.
If you have an equalizer remember... it's an EQ not an AMPLIFIER. in other words dont make it louder with the EQ, be sure to remove some sound level from other places so that what you add is taken away elsewhere (NOTE: Low end consumer stuff does this for you now. Protects the consumer from themselves.. Any EQ that cost less than $400.00 is low end)
When you thinks something sounds bad, assume that you messed it up, and check the settings again. 99.9% of the time the user has screwed a setting up so badly (By cranking all levels up to max) that distortion is present in large quantities.