So I had an old Vista computer which had the HD die. I was never happy with my VISTA computer so it was a good excuse to get a new ASUS I7 with windows 7.
I sad the same problem you described, with no sound after installing the VS10 PLUS, on my new ASUS I7 with windows 7. VS10 would always give me an "external error" whenever I tried to play audio attached to a video file or just as an audio file. Interestingly enough, if the video file had no audio or if I captured a file with the audio disabled in VS10, it worked without an error message but of course, no sound. Tried windows patches with no luck and then I went to the COREL tech suppport web site for update packs http://www.ulead.com/tech/vs/vs_ftp_10.htm
First downloaded and installed the "Ulead VideoStudio 10 Service Pack 1 (Release Date: 2007/01/15 )", which did not work. Then recalling that I had heard some say that Windows 7 is really like a Vista service pack 3, I decided to try loading the patches "Ulead VideoStudio 10 Vista Pack (Release Date: 2006/12/22)". That worked and now the sound for VS10 works fine with no more error messages and good sound of the video file I tried. Just got it working so I have not tried anything else yet but wanted to share this as I had been searching for a solution for a couple of weeks now and shared the frustration of others who could not figure this out.
Good luck and hopefully this works for you.