I was taught that you never look a gift horse in the mouth, and that if someone gives you even the most horrid and tacky gift, you smile and thank them politely, even if it chokes you to death. I would have simply said "Thanks so much for the cd! I will really enjoy it!" There's no need to mention that you can't or won't use it.
As far as the boombox goes, I see no need to mention it. And frankly, while I may not remember who gave me a pair of socks, I would remember who gave me a large item. She may have not meant anything by it, some people are clueless when it comes to proper behavior, but I would have been offended.....