Isiberian and Adam have given you great advice.
Try to remember the last time it worked and what "audio" cahnges you made since then.
Yes, make sure none of your settings are "muted"
Sometimes you can fix it by looking at the last update.
First look in "programs and Features" inControl Panel and see if there is an explicit Sound Blaster entry, if so uninstall; this is the easiest and least impact.
Another bolder move, and it works more that 90% of the time, is to go into the Device Manager ( on Vista, right click on Computer icon and "manage") and find and
delete the sound device. Then restart your PC and let it automatically rediscover the hardware and install the default drivers. Voilla, this usually will fix a bad driver update problem.
Good Luck!
NJ
P.S. - Thanks for all the rep points---you are a great guy