I played with it some more on my 770. Ogg files act the same as mp3s.
I experimented with the eSound output plugin configuration buffer size and pre-buffer %.
The defaults are 3000ms and 25%. When I press play, it pauses for that percentage of the buffer size (in this case just over 1 second) then plays perfectly for that same amount of time then plays at half speed after that. I set the buffer to 10000ms (10s) and the pre-buffering to 100% and it pauses for 10 seconds then played perfect for about 15 seconds then it plays at half speed.
Nothing else running, no wifi, no desktop applets.
I even tried streaming an internet radio station but no luck there either.
It's a shame because xmms is my preferred media player on my Fedora 7 desktop PC.
Thanks for your effort.

BanditRider