I am by no means an expert at describing the sound quality, so I will leave that to someone more qualified.
I am using the HTC Desire on Android 2.2 (and 2.1 previously) for about 3 months now. The stock music player is rubbish. I have Meridian Media Player Pioneer, it supports a wide range of formats including FLAC. You can download this app for free. Battery life isn't too bad, but nothing to write home about. I carry a second battery charged until I can get my Energiser X8000.
The player is fine if you stay in there, if you want to be listening to music and surfing the web or playing a game, it will st..st..stutter. Very annoying. There is no way that I know to set the process to priority for example to try and avoid this, but I haven't researched this at all either. I know the iProducts have this solved as they are music first, everything else second. Having the device available for dragging and dropping files onto the storage card is great. That is the main reasons I switched from my iPhone 3G (along with a better carrier and FLAC support).
I am happy with my choice over the iPhone 4 even with the above drawbacks.
Hope this helps,