I rebuilt my system from scratch, and decided to install windows as a guest in KVM. It installed fine, but I cannot get sound working on any of the configs [ac97 - sb16]. I read most of the web pages and referred to previous version of Ubuntu.
I have modified
vnc_allow_host_audio=1 user='myuser' group='myuser'
and made sure that myuser was a member of audio, pulse and pulse-access (maybe overkill, but just trying to get it to work).