Unless you're hitting an IP node that transcodes to g.729 or something, landline phones should sound pretty good; the mu-law codec uses companded 8-bit PCM that

Unless you're hitting an IP node that transcodes to g.729 or something, landline phones should sound pretty good; the mu-law codec uses companded 8-bit PCM that roughly equates to about 14-bit linear in terms of precision. If you're sending a lot of very low frequencies (most phones and line cards have a pass filter in them to remove stuff below ~60-100 hertz, so while the network is very capable of sending it, it doesn't always in practice), you'll start to hear companding noise, but it's rarely the case that it gets loud enough to cause an issue. As for the sample rate, 8 khz is a bit low, but you can make it sound significantly better with a bit of equalization; usually turning down frequencies near 1 khz a little goes a long way. Sometimes too, it doesn't hurt to gently (and I stress, gently) reduce frequencies near ~300 hertz if it sounds too muffled.