Un mute. Make sure the default is the right device.
Done that. The system appears to be doing what is is supposed to accoring to the activities bars. All indicators are that it should be working. Still no sound. It also won't work with the on-board sound. I tried both.
Microsoft does have an official Windows 7 RC Support Forum located here http://tinyurl.com/9fhdl5 . It is supported by product specialists as well as engineers and support teams. You may want to check the threads there to see what other users are using for sound configuration.