Hey Jester,
I'd say it is normal to hear the oil squishing through the damping mechanism, although yours might be low on oil (should be 4.5 oz. in Cb/CL or 6.3 oz. in XL) or someone might have used a too-light oil or wrong type in them. Honda recommended 10-30 motir oil in the shop manual but as I recall a later service bulletin recommended ATF in forks, I think because it has less tendency to become aerated. But any actual fork oil should work fine as well. I changed and flushed mine with Motul 10 wt. and I find the stock front forks work really well for what they are.
The biggest handling gain will come from new or reworked rear shocks. I modified my stock shocks to make oil changes, and thus damping, adjustable. It is a bit of work and certainly not the equal of higher quality shocks, but I just like the challenge of fixing stuff! Here's from a post I made on another forum:
Most of the early shocks came factory equipped with very little damping, I suppose for a plush ride. In the old days I modified one pair to allow changing to heavier oil with good success. So I grabbed a spare set of used CB125 schocks from ebay to experiment on and am delighted with the results. Now instead of each bump causing the shock rebound to build up more and more, the bouncing is controlled and the bike feels way more connected to the road, especially when cornering. They are still a cheap shock but are night and day improved over stock. I have documented the steps at the following link. Click on each photo in succession and you can read captions explaining the steps:
http://s1228.photobucket.com/user/billspurlock/library/CB125S
DISCLAIMER: You're on your own here, I am not responsible if anyone's shocks are ruined by their attempt to follow this procedure.
I was hoping to be able to drill into the lower shock body and find no obstructions, so then I could simply tap for a 1/16-27 NPT tapered plug. But after drilling a small exploratory hole I found the actual damper cylinder is just inside the shock body only about 1mm away. So instead I brazed a nut onto the shock to accept a screw plug. The steps are outlined in the link above, but here are some additional points:
-After drilling and draining I found the original oil was very dirty and a bit metallic, so if nothing else being able the change oil seems like it would extend their life.
-I have read that claimed viscosity of fork oils are all over the map so a 10 wt. in one brand might be the same or even lighter than a 5 wt. in another. So using a viscosity tester as described is the only way to get some handle on relative viscosity of original versus replacement.
-Some original oil stays in nooks and crannies of the shock after draining, so filling, working the shock, then draining and refilling to flush is a good idea.
-After completing the modification but before reassembling the springs I compared the before and after resistance when pulling the shock shafts in and out by hand. By that test I thought I would be needing to go heavier than the 10 wt. I had on hand. But after road testing I decided they were just about right.
-I looked briefly for quality aftermarket shocks but could not find the exact same length plus most were too fat at the bottom to clear the chain guard. One problem with going longer than stock is your rear wheel will no longer clear the ground when on the center stand.
-Bill