I recently built a computer, consisting of
Sempron 2600+ s754
MSI K8N-NEO FSR
512mb RAM
Since the only speakers I own are pure shite, I plugged in my Philips Headphones
(model SBC HP 170) into the audio out (well, the green connector on the MoBo), put in a CD and fired up Windows CD-player (hadn't gotten around to download foobar) and it sounded awful! Now, I'm not talking about some floating "lack of air" or the like, this shit really hurt my ears! The sound was awfully sharp and distorted.
I considered the fact the headphones could be broken, but when used with my CD-player or iRiver H120 they sounded "warm" rather than "sharp" and quite good to my ears. I tried them with my parents Turtle Beach Santa Cruz, and they sounded fine!
Is it the Realtek ALC-850 codec that is pure shite, or is it something else?
I guess that the output of the onboard Realtek i completley unamped...
The problem exists both in Windows and Linux (Kubuntu and Ubuntu 5.04).

I have a MSI K8T-Neo with Realtek ALC-655 and didn't notice any distortions or bad sound quality (used with Sennheiser HD 600). In fact, I find it surprisingly good considering the bad reputation of onboard-sound.
BTW, according to the specs, the Realtek has indeed a small integrated amp when used with headphones.
Have you installed the proper driver and chosen the right options in the configuration, i.e. "headphones" and not "8-channel surround" or whatever?

This can be summarized in a few words: Yes it is.

Do you have first-hand experience with this exact model? I have a different one, but I can say for sure that it does not sound "awfully sharp and distorted". But maybe I'm just too deaf to notice

I don't consider myself to have "golden ears", I'm not very good at hearing mp3 artifacts etc, but this should be obvious even to my grandfather.

Well, to get to the point i installed the newest drivers and made sure the "Speaker Type" option was set to "Headphones". It didn't make any difference whatsoever, at least to my ears. Guess I'm gonna "have to" buy an Audigy2 or Envy24-based card once I have a bit more money.

Onboard sound is mostly well known for its:

• low SNR and audible noise
• Bad power supply decoupling and EM rejection, so that you can hear whenever hour hard disk revs up
• Low power output and general issues dealing with high-impedance headphones and low frequency content

Your symtoms seem a bit like clipping due to low power output, although that is a fairly rare occurence (I've not heard that happening on this board). A PCI soundcard could help. What would probably work better is to get a dedicated headphone amp.

Axon: Yeah, I figured that too, but my Philips Headphones are cheapo 20$ ones, made to work with portable equipment. I know that integrated audio isn't of the highest quality, but that it would fail in driving my cheapo Philips 'phones, I did not expect. However, I've had a lot of audio related problems in games too, so a new soundcard would certainly be a nice addition to my setup.

"Integrated" anything is supposed to offer you the basic functionality-not the best quality. Such boards are meant for your average office PC. Not for gamers or music enthusiasts. If I were you, in the worst case, I would buy an Audigy 2 card.

A dedicated headphone amp will just amplify the noise in the signal. You'd need a new soundcard along with the amp.

EDIT: ah, to eliminate the clipping. I agree.

If you don't wan't bad sound, you need to replace everything, or at least sound card and headphones. Head-fi has all the info about this stuff.

CSMR: Yes I know, but I'll start with the soundcard, since the Realtek-thingy obviously even can't drive my Philips . Wouldn't be smart to buy good headphones and not be able to listen to them because of a crappy soundcard.
A pair of Sennheiser HD-555 is high up on my wishlist.

This is a bit off topic, but whats the difference between Audigy2 Value and ZS? I know that ZS is newer and a bit better, but what are the differences?
Concidering an Audigy2 because of good support in Linux and in games, and I doubt that the resampling will be audible to me. Has there been any listening tests done on this matter (Audigy2's resampling)?