Try using mpega. The sound is near perfect, and 060 will be more than enough. There are lots of GUI utils for it, my favourite being BMG (on Aminet).
BMG is ugly. DiamondGUI is much nicer and has more options.
When I play MP3s on my A500, I use DiamondGUI/mpega and buffer for 15 seconds. This gives about 25-30 seconds uninterrupted (on max quality stereo setting). I change to 90 seconds if I want to listen to the whole thing uninterrupted, but it can get painful waiting. If I like the MP3 and don't want to keep waiting for buffering, I use mpega to convert the MP3 to 16 bit AIFF, then listen to it in SongPlayer with AHI set to 14 bit++ calibrated. The AIFF takes up huge file space, but at least I can listen uninterrupted and without buffering - and the sound quality is great.
But this is with a measly 020. I would've thought an 060 can handle MP3s without problem.