Try an install the audio driver (update) from http://h10025.www1.hp.com/ewfrf/wc/softwareList?os=228&lc=en&cc=us&dlc=en&product=1127219
and then go back to your control panel to see if the sound card appears. I have a feeling that the AC'97 software isn't installed on your machine.
If that doesn't do it for you, try uninstalling the video card with the ATI uninstall utility in add/remove programs and then see if the integrated audio appears in control panel. If it doesn't, you know that something else is going on. If it does come back, I'm not sure where you can go from there