Sounds like a driver glitch. I occasionally get that with my USB speakers, which go into this odd really loud static/glitch audio. Has to do with the driver for the audio having a bug/bad code in it.

Are you using 10.5 on that machine? Not sure, but I think I heard somewhere than the B&W G3 and Yikes! G4 had issues with 10.5 in the audio department. Again, I only recall seeing it, not sure if I remembered it right...