Winamp "can" produce better sound, but it totally depends on your setup. Winamp is capable of using waveout versus directsound. Some sound cards behave better with waveout. There is also a winamp plugin to allow sound to be passed via ASIO which is a low latency, pro recocording protocol; your sound card must support this. There is also a plugin which can bypass windows built-in mixer (kmixer) which can also result in better performance. This is especially important if you have a Creative card or AC97 card that requires that all signals be upsampled to 48khz for output.
It is important to remember that output quality can only be equal to the input quality. There is no way to magically make a 128kbps Xing mp3 sound better.
I thouroughly do not believe in using dsp plugins as these alter the original sound. Also, EQ should only be used to compensate for definciencies in the speakers or listening environment.
Also, stereo sources are not meant to be played back in 5.1 (6.1, etc). Many processes are used to create the other channels, some with better results than others.
If you have a creative card, you can look into the KX Project drivers, which can significantly help your sound quality out.
All this is just general. If you list your equipment, then I can try to give you a little more in depth info.