What sound device do you have? The integrated (on the motherboard) audio or a separate sound card?
If it's the integrated audio, first make sure it is enabled in the BIOS (F2-Setup). If that is OK, reinstall the Intel Chipset Drivers then the sound drivers.
HERE is the Dell downloads, and you can get the latest Intel chipset driver (for the motherboard) and Sound Drivers for your specific installation.
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Thanks for your responses. I've tried reinstalling the intel chipset and also sound drivers from the link you sent. (I had already tried it before but tried it again with chipset update) unfortunately it's still the same. I bought a cheap sound card and installed that but unfortunately even that is giving the same problem!! This has got me baffled. Any suggestions?