RB3D works just fine with digital joysticks, I'm using a Logitech Extreme 3D with it with the twisty handle for rudders. It won't work a digital joystick AND digital rudderpedals, it is almost as if it can't make sense of out all of the inputs so it ignores the rudder pedals. A pity, but I can live with it.
I believe I have seen references to problems with the Microsoft Sidewinder and RB3D.
Your sound problems are definately XP related and are easy to get around, just follow previous advice.
Canadian Air Aces and Heroes (www.constable.ca