The side switch is the key. Depending on your settings, it may affect the mute or it may affect the rotation lock. Whichever function it supports, the other function is performed by a "soft switch." This support article from Apple provides detail.
In case you're wondering, here is the history. Originally, the mechanical switch affected only the rotation lock and the mute was a software switch elsewhere. In IOS-3, it was changed to be the mute switch and the rotation lock became a software switch. This was done to ensure consistency among IOS devices. Unfortunately, a large quantity of users complained loudly, alleging that they turned the rotation lock on and off several times every hour and the convenience of the mechanical switch is essential. In IOS-4, Apple bowed to the whiners and made the switch function selectable and now we're stuck with a mess.
If that doesn't help, continue...
Try a system reset. It cures many ills and it's quick, easy and harmless...
Hold down the on/off switch and the Home button simultaneously until you see the Apple logo. Ignore the "Slide to power off" text if it appears. You will not lose any apps, data, music, movies, settings, etc.
If the Reset doesn't work, try a Restore. Note that it's nowhere near as quick as a Reset. It could take well over an hour! Connect via cable to the computer that you use for sync. From iTunes, select the iPad/iPod and then select the Summary tab. Follow directions for Restore and be sure to say "yes" to the backup. You will be warned that all data (apps, music, movies, etc.) will be erased but, as the Restore finishes, you will be asked if you wish the contents of the backup to be copied to the iPad/iPod. Again, say "yes."
At the end of the basic Restore, you will be asked if you wish to sync the iPad/iPod. As before, say "yes." Note that that sync selection will disappear and the Restore will end if you do not respond within a reasonable time. If that happens, only the apps that are part of the IOS will appear on your device. Corrective action is simple - choose manual "Sync" from the bottom right of iTunes.
well, many notifications makes sounds but facebook and skype doesn't, idk if i know how does it work. well..I'm on the home page and i'm expecting a sound with notifications but it doesn't happen, just when I'm in the app.(sry about mistakes in english =)) ps: i tried the reset =p