Ok, further with this. It seems after a fresh reboot, when I login to the desktop, the JDS does not see any audio devices. That is, the speaker Icon has a red line through it and when you mouse over it, it says "No audio device".
Then I fire up xmms and try to play a sound - it give a similar message about no audio device.
Then I close xmms and reopen it and it plays fine.
Then if I log out of JDS and back in, the audio device is found.
So I'm still not sure whats going on with the startup process.