Frederic Kayser claims that there is "a conflict between FreePPP 2.6b2 and the Apple AudioVision extension: the conflict causes sound to go mute. Reverting to FreePPP 2.5v3 fixes the problem."
I queried Steve Dagley (developer of FreePPP) about this. He replied that updating to Mac OS 7.6.1 should clear up most of these mute problems. However, "there's still some sort of conflict with FreePPP 2.6b2 on some machines (some Audio codecs aren't available) that I'm looking into; no definite explanation/fix yet."
b. MuteOff utility Bob Boonstra has posted a small utility called MuteOff that he received from some one at Apple. He claims that it will fix some muting problems if you put it in the Startup Items folder. It is especially effective for getting your internal speaker back on when you have external speakers connected (though I always thought of this as more of a feature than a bug).
I would have posted this utility a couple of days ago, but I had trouble with the URL not working. Bob has since corrected it.
By the way, don't forget that another utility here in the Download Library, Unmute-it, may also offer a solution here.