You cant turn on 3d sound if your all ready in a game. Try turn it on before starting a new game.
if that did’nt work all I can say is it's properly due to the fact your using the nforce chipset, though if it did work in 98 its odd that it's not working now. All I can say is have you checked your drivers are up to date?
all so I found if the movies don’t play in any of the look glass games it some times has to do with what codec you have install. I did a fresh install of windows 2000 and install all my drivers and what not and the movies work fine. However they stopped working after I installed ffdshow, DirectShow Ogg Vorbis filter, DirectShow Subtitle filter, XviD and or GordianKnot CodecPack. I have no idea WICH one of the codec are interfering with the game but if you do have any of them installed you may want to try removing them to see if it fixes the problem, because after I uninstalled them the movies started working again.
And on a different but similar note instilling of some 3rd party MP3 codec such as Fraunhofer IIS MPEG Layer-3 Codec can interfere with the sound in freelancer.
Go here to see more:
http://support.microsoft.com/default.aspx?sci … kb;en-us;814549