I've got some Realtek (688 IIRC) sitting on Intel HDA. It was working ok in Tiger (geez, I want my Tiger back!), however it works awfully in Leopard. The system sounds are very distorted, and listening to iTunes is completey impossible at all.

Any hints?

You may have to reinitiate your audio kexts by reinstalling them. You can download kext-helper and use your downloaded kext to install. =) Hope this helps.

Any hints where I can find azalia.kext/applehda.kext? I've googled with no success :-/

farcaller, this is Taruga's official thread for appleHDA:

http://forum.insanelymac.com/index.php?showtopic=32859

does that help at all?