Try going to Control Panel, Add//Remove.
Locate the sound device drivers and uninstall.
Reboot the computer, normally when XP finds hardware it will prompt you to install drivers , If you have the automatic option, do this and it should restore the drivers and settings.
There is a good chance that something that has been downloaded has overwritten the audio drivers, and this should repair it.
If this fails, and you have the XP CD, put the disk in the drive and from RUN type in sfc /scannow.
Note the space between sfc and /.
This will check al your drivers and restore the originals as required.You may have to reload your updates.