My problems with wma actually have nothing to do with the quality of the music - the quality is great at small file sizes. The reason is the inability of the wma libraries to do things like allow the app writer to decide when the music stream gets decoded, and how much and how fast. So, there are very few ways for me to try to find workarounds for the current music problems in VP besides crossing my fingers and trying various ritual dances. Thus, changing music libraries starts to look better and better. Now if XAudio was able to do wmas, that would be perfect.
Music does go into the music directory.
Make sure you have the music runtimes listed on the download page. I'm not sure if installing media player 7 will get all the right files - there may be some old version 4 files that need to be still installed. The PlaySound and PlayMusic functions in VP are native, they are not VBS functions. They are both always asynchronous. The way I understand it, VB calls PlaySound through the windows API, which VBS can not do.