Issue started on June 13th on my machine running Windows XP SP3 32-bit with all updates and IE8 (also happens with Chrome, also latest version). Audio in Flash videos is garbled / distorted / cracking / popping / stuttering. So no youtube, pandora, grooveshark... In addition to online resources, I also have the same issues with Flash screen recordings on my local hard drive that play in a browser window. Windows Media Player works fine for playing audio - it's only when the format is Flash that the garbling happens.
My Flash version is 11.3.300.257. I tried the troubleshooting steps (clear settings, delete cache, etc) but nothing changed even after closing all instances of my browser and reopening to test.
My initial internet search landed me on this forum topic, which got answered with "please redirect your questions to the Flash Player forum". There you can see other people reporting the same thing.
Please see this post for the latest update regarding sound issues with Flash Player 11.3. Since you are using Windows XP, I've sent you a private message with additional testing details.