Hi
I have the same problem. I tried different versions of DOSBox on WinXP. For the 0.72 the cue-file is mounted and no error is thrown, in DOS the virtual CD has the correct number of tracks, but the audio-tracks contain no data.
In the Megapatch version and CVS-builds mscdex says: invalid path for the first mp3 file and aborts. So to me it seems as if the path resolution is buggy.

Just curious: Did you also try OGG? If yes, did it work?

Nice, allready an reaction.
Just converted the tracks to ogg, and no it doesn't work.
Maybe the files must have an special encoding? I will try it out.
Did you find a solution?

No solution for the MP3 problem so far, but standard OGG Vorbis works without problems for me. (Unless when I compiled DosBox myself. Then you must carefully watch which flags are set.)

If it doesn't play either MP3 or OGG for you, then did you consider the problem might somewhere else? (Sound set to silent or something?)

If that's impossible, does your cuesheet look like the second one here: http://www.dosbox.com/wiki/Cuesheet?
I remember that the 2048 in

1  TRACK 01 MODE1/2048

is important.

(That would be my first guess so far.)

Found the problem with the ogg-files:
I just tried them out in the cvs-build, where it doesn't work. But it works for the default build with ogg files.
So I guess we should consider MP3s simply as not supported.

I know it's an old thread, but see my reply at Re: DOSBox 0.73 - the only version with OGG support? in regards to building-from-source with SDL_Sound support. You need this for OGG/MP3 compressed audio tracks in a cuesheet. It will be added, among other dependencies/options, to the "Building DOSBox in Visual C++ 2008 Express" Wiki article soon 😉 Otherwise, just use the official binary download.