While I've read that the audio device which Virtual PC uses is not officially supported under Windows 2003 Server, I did find a blog entry which somewhat explained how to get it working. I offer my version of what worked based on my trial and errors with the original blog.
- Either mount the ISO or load the Windows XP product CD so you can access it via your Windows 2003 VPC
- Create a folder on your VPC desktop called "sound" (we just need it for a bit)
- On the CD, navigate to the i386 directory and locate the following file: WDMA_CTL.IN_
- Copy the WDMA_CTL.IN_ file to the "sound" directory you just created on your VPC desktop
- Go back to the CD and navigate to the Driver.CAB file - inside there you will find a file called ctlsb16.sys you want to Extract that to your "sound" folder.
- Get thee to a command prompt (dunno why I wanted to say that) and navigate to your "sound" folder
- From the command prompt type "Extract WDMA_CTL.IN_ WDMA_CTL.INF" (without the quotes - did I really need to include that?)
- Now you should be able to install the drivers for the virtual SB 16 device on the VPC - but wait there's more!
- You may need to go to the Control Panel - select Sound and Audio Devices and enable the sound service - This will require a reboot and then you should be able to hear audio on your Windows 2003 VPC.
P.S. - the original blog entry I found on this is here.