I fixed audio issues in VM guests by setting the following in qemu.conf:
vnc_allow_host_audio = 1
I also set user= and group= to allow qemu-kvm to run as the same user as I am logged in as. This allowed qemu-kvm to send audio to pulseaudio.
I am using the ICH6 virtual audio driver in my VMs. In my Linux VMs, the sound works perfectly without any issues. In my Windows 7 VM, the sound works with the exception of static and choppiness in the audio. Has anyone else seen this or have any ideas for a fix?
Thanks!