I want to compile madplay for ARM720T CPU in Linux. But I find the output sound is terrible. I think the 8-bit PCM output may get better result in this CPU. Can anyone tell me how to get the 8-bit PCM output using madplay?

You'll have to modify the code. If you're using the OSS audio module, change the default requested format around line 99 in audio_oss.c to AFMT_U8.

Out of curiosity, what makes the sound terrible? Is the CPU running short, or is it an issue with your sound hardware/driver?