I'm not enough of an audiophile to tell you about sound quality.
However, I couldn't find any settings in the Music App or anywhere else. I was under the impression there were settings, but it seems not.
Can't find settings for Nook Color Music Player either.
Yeah, I discovered the same issue, much to my dismay. There seems to be a crazy bass and treble boost, making music virtually unlistenable, and there are no tone controls whatsoever to correct it.
I didn't expect much from the tiny built-in speakers, but I figured it would sound good when I connected my high quality headphones. No such luck. I really hope they fix this, as I had hoped to use the nook HD as a music player.