I actually built this one 6 months ago and sound was working fine. Since then, I've added USB based head set which also worked fine. If I plug it in, sound comes out of head set and if I plug it out, sound comes out of speakers as expected.

But since about 2 weeks ago, it stopped working. Driver dialog says all are working fine but the control pannel for sound says no sound devices if I unplug the headset. I tried installing sound drivers from the CD but didn't work.

I tried installing another instance of XP just to see if my environment got botched up... No sound there either! I did not touch the BIOS setting.

I am trying to avoid buying a dummy sound card to get sound but at the moment, I don't see any other options. Why would the device manager report that all sound devices are working fine?

I'd appreciate if anyone has any suggestions. Remember, this setup worked for me for months before it failed all of a sudden.

That's an odd one. I would default the BIOS and see if that has any effect, which is doubtful. If you reloaded XP without the headset installed and you get nothing, I can only guess that it's a hardware problem, but that's only a guess.

Maybe try a BIOS update, more for a refresh than the newer revision.