I didn't find any thread with this exact problem here, so here's the short version: I fixed my WinAMP (and other players too) skipping and stutter problem by disabling the wireless connection, which is a Belkin 802.11g PCI card.
The long version is that there were spikes in CPU usage from a base of about 5-10% to about 40-50% and that's when the audio would stutter. Other things I tried, but which didn't work:
-Reduce and Turn off Hardware Acceleration for audio device
-Kill all unnecessary processes (wupdate, touchscreen, GPS serial emulator, Bluetooth, rundll32, etc.)
-Increase Winamp buffer to 10MB (whole song)
-Reduce Winamp quality to Half.
-Set WinAMP priority to Realtime.
I read somewhere else that disabling the WiFi card worked for someone, and sure enough that did the trick. Now CPU usage stays at about 2-5% flat for the whole song, and more importantly the audio doesn't stutter anymore. The WiFi connection is just set to Disabled, so I can enable it just fine if I need it. I don't know if it's a Belkin driver or Windows XP's Zero Configuration hunting for a signal (might be helped with WiFi Hopper) or what but it's just another annoyance.
Specs: PC Chips M863G, 1.2GHz AMD Mobile Duron, 256MB DDR SDRAM, WD400 40Gb HDD, Belkin 802.11g WiFi PCI (disabled), SBO2 Touchscreen, Belkin USB Bluetooth dongle, Earthmate LT-20 USB GPS, M2-ATX HV power supply.
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