This happened to my MacBook Air Rev A recently too.
Symptoms: No sound, no mike. No audio device in Prefs. No sound in connected headphones.
Initially the sound started coming back after waking from sleep, but would disappear again after a period of time.
Then it came back after doing a PRAM zap. But the audio device (and sound) would disappear after putting the MBA to sleep and waking. Then even the PRAM zap would not work and an Onyx cache clean together with PRAM zapping worked once.
Called Apple Tech Support and they suggested an SMC reset. Did that and the sound returned, but disappeared again with the next sleep/wake cycle. At this point no amount of zapping, cache cleaning or SMC resets would revive the audio device.
Like everyone, I thought that an Apple system update could have been the cause. I backed up the MBA and rolled it back (by using a restore with Time Machine) to a few months back. This is not for the faint hearted - it took over 14 hours (55GB SSD). Still no sound.
At this point I had nothing to lose, so I re-installed OSX from the original disk, in essence rolling the MBA back to its factory settings. Still no sound. It had to be hardware.
This time I booked a Genius. Guess what, the only question he asked me was whether there was any sound from the headphone jack, and immediately began writing out a job-order which included: 1 Flex Cable.
The MBA is now back with its sound, and boy, you really do not realize how much of the basic experience on a Mac is based on sound (such as cues) until you do not have it.
From my experience it seemed like it was a gradual failure of the hardware. Why PRAM zapping and SMC resetting worked for a while is perhaps something for an electrical engineer to fathom.
My theory about why we initially think the cause could be due to an Apple update is that the relatively high frequency of updates would mean a high probability that one's MBA would lose it's sound just after such an update.
Hope this helps - if you have these symptoms, you need a Flex Cable replacing!