Sounds does work. When I released Quake 2 I did not have the storage capacity to store then entire pak file, so I stripped out the sounds. Thus I could not verify whether or not sound worked on a PPC. Sound did not work in the emulator, so I assumed it would not work on an actual Pocket PC either. However since that time I have been able to run Quake 2 on my iPaq 3630 using the entire pak file, and sound does work.
Dan East