adpcm, distortion, and dithering

We're using the Intel/DVI ADPCM algorithm. It works well but it distorts 
the audio beyond our specifications (greater than 7% THD+N for frequencies 
greater than 2KHz). 

I am thinking triangular dithering the signal before it is compressed 
may help (using 16-bit samples). 

When toggling the least significant bit of the sample between -1,
0,1, is this a "random" operation or is it periodic?

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Zero Crossings, Inc. -- Embedded and Digital Signal Processing Systems

http://www.zerocrossings.com/