the ATIIXP in my MSI exhibits this same issue.
essentially, if the 'PCM' level is set to 100%, things are horribly overdriven.
the solution is to set the Master to 100%, and adjust volume with PCM, instead of vice
versa. i guess whether this is a hardware bug or a driver bug depends on if PCM is the
last point of software contact with the stream and master trims the levels after that, or
if PCM just does some multiplication on the bits
im leaning towards the former, since it sounds like an analog distortion, more than
digital clipping. but ive never written a Driver or examined the schematics for commodity
AC'97 implementations...
not sure how to cap the volume at 80% with aoss, though. wasnt around in the OSS days..and
prefer my apps don't relive them ;)