It's not static so much as a 'hum'.
Through more googling (didn't think to use 'hum' as a search term), I think its the 60 Hz AC power signal from the computer getting into the stereo.
One solution appears to be using a transformer to match the impedance.
Does anyone have any experince with this product:
Radio Shack Transformer
Or should I search for a better solution (use a PCI soundcard perhaps?)
I dont mind putting a few bucks into this solution, but I dont want to spend a ton of $.
(If I am wrong please correct me!)