Hard to guess what might be wrong. For me anyways.
First thing: alsa and esd are different things, you don't use 'one or the other'.
alsa (as the older
oss which will be replaced by alsa) is a sound system. It provides the drivers for your sound card.
esd (as
arts) is a sound daemon. As you can normally only play one sound stream at a time under linux, some people created sound daemons which listen in the background for incoming sound streams, intercept them, mix them together and then send them to the sound card as one. That way you can for example listen to an mp3, play a game with sound and hear an 'incoming mail' notification at the same time.
As for your actual problem, try reducing the volume with a mixer application (like alsamixer). Maybe the output is too high which can cause distortions. At least I had this problem when I used oss some time ago. Also try applying different equalizer settings if your player has one (xmms does). Maybe you had a setting which your ears got used to and now the default doesn't fit to you.
Good luck!
