Have you got any decoder HW? What CPU have you got?
If you've only got Paula, check your Amplifier settings to make sure it's NOT using AHI and then the quality is set to low. After a bit of playing around I got my 030 to play MP3's at a reasonable quality (just don't expect to be multitasking while you're doing it). An 060 on the other hand can play MP3's quite well on a Paula only machine.
