LE 5 Zoom H4n Audio Artefacts

I purchased zoom H4n which came bundled with LE 5 but I have a little trouble in getting the audio interface to work correctly.

The Problem:

Audio artefacts similar to low sample rate noise occurs throughout input and playback (Rapid Share .Wav Example: E A D G B E on a 12-string guitar)
I’m assuming the H4n is to blame as my M-audio Delta card works fine.

The Setup:
OS: XP (SP3)
CPU: AMD Phenom 9500 Quad Core
SFX: M-Audio Delta Audiophile 192

The Story So Far:

ASIO drivers for H4n up to date (v. 1.0.4)
Latency is set as far as it can go (20ms)
Project setup is same as H4n settings (44.1kHz 16bit)
Tried uninstalling re-installing drivers, multiple computer restarts, no joy

Audio playback in other applications (Firefox, windows media player) is not affected

Are there any kind souls who could offer some advice/possible fix?

Did you select the correct ASIO driver? Is the Zoom USB or Firewire?

Definately the correct ASIO driver, USB connection