It’s definitely a BeatBuddy Manager issue, and not the project files. All other audio plays fine on my Vista machine, including multitrack Reaper files using plugins, MIDI files using several players, and MP3 and WMA files using various players.
BBM also plays the same (static-y) way on an XP laptop, but works/sounds great on my Windows 7 laptop using the same project files. Yes, I am an experienced beta tester, LOL
Here’s a second demo video showing Windows Task Manager and CPU Utilization (Windows Vista 32) before and after starting BeatBuddy Manager and playing a song, along with the bad playback. This is with no other apps running. You can see it jump from 1-4% up to 54% during playback. I have 2GB of RAM, and only 1.09GB is being used, so it’s not (or shouldn’t be) a memory issue.
“Distorted” is really not a proper description. This is clearly a LATENCY issue.
I have exactly the same audio playback symptoms - win 7 basic 64 bit with an EMU 1820M audio interface.
Same problem with distorted output. Windows 7 Pro.
Same distortion problems here with Windows 7 64bit Pro.
Thanks for reporting this issue guys. We’re investigating the problem.
Are all the sounds played by the BBManager distorted, or is it just the Virtual Machine?
To play a sound that is not played by the Virtual Machine, click on the “single track button” (the little triangle ‘play’ button on the upper left side) of an Accent Hit. Is that sound distorted too?
yes for me…
Except for the accent…
Are you looking into the distortion problem?
Yes. Since the accent hits are not affected, it seems to be a glitch in the Virtual Machine. We’re working on fixing this and plan to publish an update soon.
Thanks for your patience! 
Very good . Thanks.
not sure if this helps, but my problem is erratic… and affects both the clips and the VM.
thanks
We think this is a buffering issue. We’re working on a solution.
If you happen to have a more powerful computer this will probably not happen. Also try closing any other programs you have running.
The distortion problem is driving me nuts. I have to click on play many times before it comes in clear if it does at all. What’s up ?
What’s going on with the distortion issue?
The team is working on it.
Ok Thanks
I’m using the BB Manager via Parallels Desktop on my Mac. Yesterday I bought and installed Parallels Desktop 10 (used 7 previously), hoping that this would help sorting out the distortion/lagging issue, but it didn’t, it got worse. 
Unfortunately, I can’t go back to version 7.
Please get this problem sorted out as soon as possible because as of now the BB Manager is just about completely useless to me.
I have had these problems too - distorted audio, software freezing and slow access, for example to highlight a song or play an audio sample. I am running a pretty fast computer with Windows 7 and an Intel Core i7 2600K chip, 8G RAM and an external MOTU 828 mkII audio interface. I initially thought I might have fixed the audio distortion by increasing the audio i/o buffer size to 1024 samples per buffer. Unfortunately, however, this only worked for a short while before reverting to distorting audio. I suspect there is a buffering issue at work here.