I have been having this issue with iTunes on Win7x64 and Win8x64 since iTunes 10. The issue is directly related to Windows Audio Session.
I'm no audio engineer, but I know when my audio sounds like crap, and that is what I have been experiencing since iTunes 10 while using Windows Audio Session instead of Direct Sound.
From the research I have done on this issue, I found that starting in iTunes 10 I had to always set my iTunes to use Direct Sound if I wanted clear audio when playing local audio files or audio streaming via iTunes Match/Radio. Any attempt to use WASAPI instead of Direct Sound always resulted in poppy/skipping audio playback.
I get these results from three different audio sources on my PC. I have tested onboard RealTek HD audio, Audio out through my Nvidia 550 Ti, as well as my Sound Blaster Audigy FX. I have also tried many many many different drivers for siad devices.
Now that iTunes has finally gone full 64bit on Windows with ver. 12.1, they have removed the option to use Direct Sound as from the sounds of things Microsoft has been moving away from Direct Sound and to Windows Audio Session (or WASAPI as it is also referred). I'm going to assume WASAPI is the prefered audio API that MS wants devs to use when making 64bit programs.
It is also my understanding that Direct Sound does not have direct hardware access where WASAPI (if put in "Exclusive Mode" in the Windows Sound Control Panel) has direct hardware access.
My issue with this is that I do not consider my PC low end (see below for specs) and should have no problem processing audio off any of the three audio sources listed above. But even when I disable "Exclusive Mode" the results stay the same.
So at this point I have no other option but to use older 32bit code on my machine just so that I can use Direct Sound. I would very much like to run newer 64bit code on my machine and not be punished for doing so.
Now... I do want to note that, I have not tried removing my Nvidia GPU to see if the issue goes away or not so this could be an Nvidia driver thing. But, I have tried disabling the device in the Windows Device manager with no change in regards to this iTunes issue.
Hardware:
Motherboard: MSI h77ma-g43
CPU: Intel Core i7 3.40GHz Sandy Bridge 2600 Quad Core
RAM: 16GB
SSD/HDD: Samsung EVO 480 SSD 128GB, Micron SSD 128 GB, WD 1TB HDD x2
GPU: Nvidia 550 TI
Current Audio : Sound Blaster Audigy Fx feeding 2.0 stereo, Logitech Speakers or Sony Earbuds
Network: Onboard Realtek gigabit wired to Apple Airport Extreme 5th gen