After about 3 hours of messing with all kinds of different settings and scouring the internet for a solution, i got Shogo to work without sound problems. It seems like no one thing was enough. I had to figure out what settings in the launcher caused the least amount of problems. the popping and stuttering was still really bad. I noticed that disabling the vertical sync in my video card drivers helped quite a bit. After that the game was at a point that i might be able to put up with the stuttering... might... I wasn't ready to give up though! I started reading through posts on unrelated problems hoping i might find something else to try. I stumbled upon a console command that fixed some peoples video problems and tried it out. It fixed the sound issue!
the command is "maxfps". you have to follow it with a number. It limits your maximum frame rate to that number (you might have guess that). It worked so well that i could re-enable my vertical sync. I then tried messing with the other settings in the launcher and found that the problem comes back if i don't enable some of the advanced settings. I Didn't really feel the need to find out what ones i needed on. I just activated them all. I need to be using DirectSound3d with EAX, or Miles Fast. Otherwise i still have stuttering and popping.
to use the command press "~" key (the key just to the left of the number 1 on your keyboard) to open the console. Then type in:
"maxfps x" where x is whatever number you decide on. i use 55. so i type in:
"maxfps 55" Then you have to press enter and then close the console by pressing the "~" key again. you will need to use this command every time you start up the game. Also, in case some of you don't know, the lower the number you select the less smooth the game will be. On the other hand (at least for me) if the number is too high, there may be stuttering. 60 is about as high as i can go before i get problems

I just noticed that enabling anti-aliasing in my driver settings makes the sound problems very bad, and also seems to have a major negative effect on performance in general. (way more than AA normally does). If your still having issues after trying everything else, then try messing with your video driver settings.

Just reducing the hardware acceleration to "Basic" fixed all my sound stuttering issues. I can now enable all advanced features and choose any sound system I want and the sound is completely clean.
+1 to KingofGnG

Single-pass multitexturing is the one that fixed the performance issue for me. Lowering hardware sound acceleration in dxdiag fixed the sound popping.

Thanks for the tip. This is the solution that worked for me :)

open autoexec.cfg find "MaxFps" "0" if its not there add it exactly change 0 to 60 and thats it no need to use vsync or triple buffer. it fixes abnormal speed ups and mouse

My suggestion would be to set each executable to run in Compatibility Mode for Windows 95, assuming this is still possible in Windows 7 (I'm still running XP). That along with switching DirectSound down to Basic worked wonders for me; I'm actually surprised no-one has mentioned doing this yet.

YES that's it that fixed my problem

I'm getting some funny behaviour where (sometimes) no damage is done to me, even though I am very clearly getting hit by enemies. If I lower the FPS to something like 10, I do receive damage.
Anyone else with this problem?

It happens even in the first level, I can just stand still and maybe 50% of enemy attacks will actually damage me. This happens even when I run the game at 30 FPS.
It's weird..


Edit: Not sure if it's FPS-related after all. I feel like I'm cheating my way through some parts because I take no damage when hit. Oh well, so be it! :-)