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When I am in combat, the game will freeze until I hit [ESC] and it will resume as if nothing happened. I went to task manager when this happened and there is an error winder titled "DIRECT SOUND ERROR" with "CANNOT SET CURRENT POSITION" with an OK button. I can't find any relevant controls in the options screen.

Gateway MX6426
AMD Turion 64 ML-40 2.19 GHz
2 GB RAM
ATI Radeon Xpress 200M
XP Media Edition SP3
This question / problem has been solved by Ravengerimage
Which game? I-War 1 or 2?

You might want to try turning directx sound accleration off.

1. Click the Windows Start Button, select Run...
2. In the Run window type "dxdiag" without the quotes.
3. In the dxdiag window, click the sound tab.
4. In the Sound tab, move the bar to the left to set the "Hardware Sound Acceleration Level" to "No acceleration".
5. Click the exit button.
6. Reboot windows
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Ravenger: Which game? I-War 1 or 2?
Sorry- I-War 1. That did appear to solve the issue, thank you much!