Chris, what are you using as a playback device? An amp or a portable cassette player? An amp would be better, using it's tape deck's out ports to the line-in on your sound card. Make sure the inut levels aren't to high (double click on the speaker icon in the task tray). There's nothing worse than digital clipping, and it sounds like that's what you're hitting. If you are using the mic-in, David's advice is good but again, check those levels.
Greg, you should maybe check out Diamond Cut ver 5 for audio restoration (you can check out the specs on the
Tracertek site). WaveLab is made by
Steinberg, but I can't find it on their site anymore (very painful site to use - probably made by a professional

). I got WaveLab Lite with my soundcard and with Clean! software which I bought, but don't use.