Is it turned on in your .conf file?
Are the IRQs and such set properly in the game setup?

Yes it's turned on. There's no options to edit the IRQ in game, only the port.

Odd...the one I have (from Bethesda too) does have said options for Digital (which at least for me sounds like the guy is gargling)...anyway, disable soundblaster for that game via the .conf file or change its port, as the midi port for daggerfall seems to be stuck at 220...the same one soundblaster uses; in turn, set ultrasound to use port 220...

For digital sound I suggest configuring the game for SB16 because a GUS config has some issue where it sounds bubbly or garbled. It's possible to manually edit the HMISET.CFG file to use a mono GUS driver instead of a stereo GUS driver, which sounds OK in DOSBox, but loss of stereo is probably a bad thing.

For GUS music you need LOADPATS.EXE and PATCHES.INI (such as from here) to load instrument patches into the GUS. Make sure you have the GUS instrument patches correctly installed, and run LOADPATS before running the game. The setup program only offers port 0x220 for GUS music, but you can manually edit the HMISET.CFG file to select port 0x240 that DOSBox uses for GUS by default.

Well I think I got it working, at least I hear music with Gravis Ultrasound selected in the .cfg file. I don't know if the midi is just really bad in the starting dungeon or what but it sounds really weird. There's lots of pitch bends and such that sound really bad and go on forever.

So, I think I may just try and use the s-yxg50 soft synth from XP. The only problem is I'm on Windows 7 now so from what I understand they totally got rid of the midi stuff. What is the best way then to get the XG stuff working again? I have VSTHost and the XG plugin working, but what's the best way to pass that through Windows? Before I have tried Loopbe1, but I still couldn't figure out a way to make Windows use that as the default midi device. I was able to get Dosbox to use it, but that solution only works for Dosbox. Is there a way to have Windows use it so it is universally applied as my default midi device?

edit: Well now I'm having problems with Loopbe1. I get music in game but it says not to connect midi out and in within a single application and then I get a feedback loop. I guess the way I have it setup in VSTHost is wrong?

You could try this:
http://www.sierrahelp.com/Utilities/SoundUtil … IDI_Mapper.html

I tried that but apparently windows 7 64bit does not have the option to view 32bit control panel items. I don't know how else I would make it appear either because by default it does not.

It does open said control panel item...I have Win 7 64 and it works...it should go into the %systemroot%\syswow64 folder or just open it directly where you decompressed it.