I am also having a very similar set of issues. At first the sound would work perfectly (dialogue, effects, music, and ambience), but after about 25-30 minutes of playing the music and dialogue would stop functioning. My cut scene sound is fine. Only just today my sound has become even worse. Now instead of just cutting out, I am getting really bad interference sounds (somewhat like a cell phone too close to the speakers). When I move the mouse the interference gets worse (stay still it sounds OK, move and it goes crazy). The game also slows down drastically and gets momentarily choppy as if the hard disk is trying to load a large file and the system is lagging. Either way it is making the game completely unplayable. This is the only thing I've found anywhere regarding this problem. Must not be widespread? My system specs are:
Althon XP 1.666 GHz
512 MB DDR
Asus A7N8X-E Deluxe
LeadTek GeForce Ti4200
Sound Blaster Audigy 2
Maxtor 80GB Hard Drive (DMA Enabled)
Pioneer 16X DVD Drive (DMA Enabled)
Windows 98SE
That should do it. I have all of the latest drivers for my hardware installed (did this after issues in SC

T started). I'm going to keep fiddling with things, I'll repost if I have any luck.