it is actually because of the Xbox Dolby Digital encoder, the latency is so ungodly bad that if they made the audio any bigger the music will lagg way behind the scene.
the smaller the files the lower the latency on the xbox, on the PC it's not the case for non-on board sound chips, but they din't mod the audio in anyway from the xbox besided EAX2/3/
Halo 1/2 audio is also not great..