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If after setting your System Prefences for Audio, your audio doesn't come out after upgrading to Mountain Lion, and resetting the PRAM doesn't help, The Applications -> Utilities -> Audio Midi Setup may need to be unmuted on the various channels of output.
Below you'll see an image of the Mountain Lion version of Audio Midi Setup.
Note how there are checkboxes above the Configure Speakers on the bottom right, in a column under the word Mute. If any of those boxes are checked, or the Format is not 44100.0 Hz, you will limit the amount of audio out on various applications.
Make sure the frequency is 44100.0 Hz for maximum stereo enjoyment. If you have DTS Speakers that may change the frequency you'll need.