If you click on 'Listen Cable", you will not get the live365 server - you will get the main server. The address is
http://live.str3am.com:2010. The Live 365 server is only available on the web page if you go down to "servers" on the main page, and click on the relay server 56k link. You can always tell the live365 link since the audio will say "Live365!" before the stream starts.
I'm assuming you're using a cable modem or DSL. If you are using a dialup modem, you'd click on the "Listen Modem" link on the main page. It's address is
http://live.str3am.com:2020. It also has a live365 relay, available, by going ot the "servers" part of the main web page.
The music is digital - it cannot vary in quality - either you get the music on your computer, or you don't. Are you getting interference on your speakers?
Are you using a Mac?