I actually reported this problem a while back with an older version of DPS. I upgraded to 1.2.2, which works great. The upgrade fixed a problem I had before, where DPS would not play videos stored in my photos library, which now works well.
The audio problem I reported previously still happens with DPS 1.2.2. Specifically, the audio breaks up into what I can best describe as static or random noise. It happens right near the end of a track. I was listening to the song Chasing Cars by Snow Patrol. When the song was almost over, it suddenly broke up. I took a quick look at the screen and noticed that the progress bar was jumping around in the last few seconds of the song. It was going back and forth while generating the noise. It didn't complete the track, so I had to force it to the next song. This album is reported in iTunes as 256kbps (VBR), which I imported from a CD using AAC encoding and iTunes Plus. I replayed the track to see if the problem recurred, but it played fine the second time. I was listening to a playlist at the time, and this problem happened at least 3 times while listening to no more than 15 songs.
I have a 64GB iPhone 4S running iOS 5.0.1. I'm using iTunes 10.5.2.11 on a Windows 7 64 bit system.