FWIW, I have the same MOBO in one of my PCs. The onboard audio works great w/1G PIII, but would not play correctly when I changed to 1.2G. Tried reloading Win2K fresh to new drives following FAQ directions for load order, then tried contacting Intel (no help or admissions there).
I came up with 2 basic choices: swap back to 1G PIII, or use a sound card (the Audigy and Fortissimo II both work fine with 1.2G). Not ideal, but the best I found at this time.