If you are using alsa ( As any 2.6 kernel should be ), it should work ok when in \'software\' mode, use pssetup to select this.
Fire up alsamixer to check that the appropriate channels arent muted or have the volume set too low.
Alternatively, you could try installing the OpenAL sound library, and then choosing the \'openal\' option in pssetup rather than \'software\'. OpenAL should interface with whatever your native sound apis are if compiled and installed correctly so planeshift can delegate all the audio stuff to it.
http://www.openal.org/My pssetup always exits with the \"Error saving configuration\" message even though the configuration is saved properly, I dont think this error is of concern.