In addition to the great detective work here that has narrowed down the hardware variables consistent with this sound issue, I also find it interesting that Apple now states that "iTunes 10.5 no longer requires or includes QuickTime."
While its obvious iTunes 10.5 is the issue, this removed QuickTime software dependence variable may very well also be contributing to the problem that the new iTunes 10.5 version has with its audio decoding issues on certain Windows XP hardware now.
The new version of QuickTime isn't having any audio problems on these machines.
Now that iTunes 10.5 is independent of QuickTime, it seems that it now might not be programmed to handle all the decoding scenarios on these older flavors of XP systems like it could when it relied on QuickTime in the past.
Meanwhile, I too followed the majority of what has been described here to rollback to iTunes 10.4.1 on our Windows XP machine.
If you don't both uninstall iTunes 10.5 and also the version of Bonjour it installed to be consistent, then the iTunes 10.4.1 installer will announce that it finds a newer version of Bonjour when it tries to install it's earlier version.
I did not have to uninstall QuickTime or downgrade it to a previous version. Actually, I had already updated QuickTime indepentendly to the current version a few days before iTunes 10.5 was released.
As others have stated, after you manually restore the 10.4.1 Previous iTunes Library backup file, running the iTunes 10.4.1 installer also reinstalls its version of Bonjour without announcing that it found a previous version of Bonjour or the newer version of Quicktime in my case.