It appears to be a combination of several factors, ranging from poor hardware and driver design on the part of Creative Labs to other factors such as ACPI. A very simplified explanation is that unless the card is allowed to hog the PCI bus when it wants to output sound, the sound stream is subject to sporadic interruption and this is what you hear as crackling. If you have a high performance video card which utilizes the memory bus heavily, the chances are quite high that you'll experience crackling with a Live! card.
FULL STORY @ VIAHARDWARE (http://www.viahardware.com/scfaq.shtm)