I've done some audio tests in 12.5k mode and 6.25k mode on my Kenwood NX-300 portables. There is NO DIFFERENCE detectable in digital audio quality!!!! If there are any small differences between 6.25k and 12.5k digital modes, my ears can't detect them.
As for digital audio quality in clear vs. encrypted mode, I have done some tests on a non-ham (Part 90)system that I'm a user on. We have found there's a very small loss in audio quality in encrypt mode vs. clear mode. It is hard to detect but noticeable if you listen very carefully. The difference is small enough that it's not worth worrying about. We also found that when the received signal strength gets down in the noise where it starts to "go digital" encryption mode suffers a little more than clear mode does. We found it a little strange given it's all digital whether in clear or encrypt mode. My gut feeling is the encryption algorithm doesn't handle individual bit errors very well. The effect is the received audio garbles up a little more easily than clear mode does. It's subtle but noticeable. So if your received signal strength is right on the fringe and bumping up against the digital brick wall, you're best off to use clear mode only.
N1OTY, good to meet up with you again at Boxboro! I am planning to be at NEAR-fest in October.