I have been having the same problem after upgrading to Win 7 64bit from XP. The sound crackled and would cut out for 1 sec every few minutes. In addition, the games got more laggy as they progressed, even with video and audio set to lowest levels, even on single player.
Audio set to stereo output using onboard sound, 2GB RAM, ATI Radeon 4800 HD, AMD 5600 processor. I have all the latest drivers installed. The problem seems worse when I have my Logitech G35 headset on, but it may be that the sound being closer to my ears makes it more noticeable.
However, since the latest Demigod update a few days ago, I have not had any issues. I still have audio and video set to the lowest levels because I don't want to mess up what's working for me. Has the audio problem been addressed in the update or do I have a false sense of security?