I have a 366mhz G3 processor, also with choppy play of mp3's.. about every 3 seconds (the timing seems to be consistent) I believe, it makes an annoying click-like noise. All of the other file format's I've used (wav, mov, midi, jpg) run beautifully. It must be a bug.
I use MacAMP 1.0b7, which plays mp3's flawlessly. I recommend it to anyone who's having this problem, until Apple resolves this minor *BETA* bug.