Ian Walker had a problem with sound on Windows Phone 7 but fortunately he found a way to solve it using XNA.
I am developing most of my WP7 apps in Silverlight 3, then doing whatever porting is necessary to get them running on WP7 (the final stage is then optimising for WP7, but that’s another story). ‘Nuke Your Office’ (http://apps.webservicesuk.com/NukeYourOffice) has a lot going on sound-wise (multiple WMA files fired at random and in parallel). All was fine in SL3 but when I moved to WP7 I realised that I had an issue with performance. I recalled reading something about being able to use XNA functionality for playing sounds within Silverlight/WP7 - A little searching later and I came across the “Physics helper Library” that already contained just the functionality I was looking for.