In my opinion one of the main flaws of the Android ICS OS the big audio playback latency - about 88 ms. This impacts negatively many applications that emulate musical instruments and the ones that do VOIP like Skype or Google Talk. For VOIP apps the audio lag also has a negative impact on acoustic echo cancellation - probably the most difficult feature to implement on an Android phone. In spite of many user protests and requests apparently Google has chosen not to do anything about it.
The attached package should be used only by experienced users that can eventually restore their system to the original state. I tested it only on ICS 4.0.4 GSM phone build IMM76I (maguro). In this configuration it worked flawlessly as far as I could test it. Other successful testing reports coming for CM9 Nightly Builds, AOKP and rascream maguro ROMs.
The latency after aplying it should be about 20 ms - as reported by the "Caustic 2" app.
Original package replaced by "lowlatsnd_inst.zip"
To restore to original state you may use "lowlatsnd_rest.zip" or other restore methods if necessary.
Note: applying this might reverse changes made in other mods.
For anybody who has flashed the Jelly Bean update: has this bug been fixed?
EDIT: We're getting confirmation that it is indeed been fixed to a degree:
It looks like they've finally addressed the long standing audio latency issue in Android. I was watching the Android Fireside Chat and they mentioned that audio latency on the Galaxy Nexus, running on Jelly bean, has been reduced from 100ms to 12ms. But, they're still not satisfied as they want to reduce it to below 10ms. So it looks like some of those iOS music apps which are heavily reliant on low audio latency targets may finally be coming to Android.