I'm pretty sure you're thinking about Winamp 3 or 5. Winamp 2, upon release (in 1998!) had no such feature IIRC. It didn't even have a "Library view" of all your MP3s, it only had a very rudimentary playlist.
The main thing about Winamp 2 was that it was fast. For example, the skins were just bitmaps (none of the crazy theming that Winamp3 enabled). The visualizations were delivered by a set of plugins -- all of which you could get rid of.
I also believe that WinAmp just sounds better. Even after playing with the EQ on iTunes, I can't get it to sound as good as WinAmp.
I really dislike iTunes, but I find this claim hard to believe. In the audiophile community, we usually test such claims with double blind tests. Interestingly enough, a metal wire coat hanger held up just as well against $100 premium Monster audio cables.