There seems to be more background noise and or an echo effect of sorts when I use the player attached to my stereo as opposed to in the car.

MP3 compression usually does not sound like background noise or echo effect.

Please describe the background noise. Put the player on "pause", is the noise still there? You could simply be describing a ground loop with the AC adapter, usually solved by trying a different power supply.

If you hear an echo effect, check to make sure that your home stereo is not set for some sort of "cinema surround sound" effect.

Perhaps it would help if you described your home stereo, and how the empeg is connected to it, in more detail. For instance, what input is the empeg plugged into on your home stereo and what are the stereo's settings on that input?

I would also like it if it were a bit louder; is there any feasible way to utilize the 4V inputs in conjunction with my stereo?

Yes, either with a second docking sled, by purchasing another car docking connector (just the black plastic part and the pins), or buy purchasing/building your own home docking station.

However, first check to make sure that, when plugged into your home stereo, the empeg is turned up to 0db maximum (but not overdriven past 0db). That is the correct setting for home use.