Thanks for the responses. Unfortunately, I have nothing else to test the cable with.
I noticed a similar reduction in sound quality when I hooked up my ipod via RCA cables. I tried the ipod via RCA cables on a newer NAD receiver and the sound quality was equally as poor; the music sounds distant, thin and lacking in the richness I enjoy from my cds.
I rip the majority of my music in wav file, so I don't think its necessarily that either.
Unfortunately, my receiver is before the days of HDMI, but I'm skeptical as to how much difference that would actually make.