The MP3s are in a low quality format that will significantly reduce the sound quality. Also I suspect that you are performing the audio processing in a less than optimal quality format. For best quality work in 44100 Hz 32 bit float format (48000 for DVD video). Sample rates lower than this will tend to sound muffled and lower bit formats will add background hiss. See here about default settings: http://manual.audacityteam.org/o/man/quality_preferences.html
Note that importing some types of audio file will override these default settings - ideally you should work in an uncompressed format (such as WAV) throughout the process so as to preserve the best sound quality.