The issue you are having with the skin is the new eqBall png is not in the skins folder. Did you try the new Xparent skin I put in the Goodies folder? You know you are using the new skin if it defaults to a purple background.
I will investigate the audio breakups with iTunes. 2.0 and 1.2.3 use the same driver so that could be the culprit if the same issues arises in both versions.