Thanks to the power of Flash MX I can now work with audio data. Be sure and turn on your microphone and let flash access it. You can right click on the flash window to access the microphone settings for the MX plugin.
If you have a microphone plugged in, allow flash to access the microphone, and the flash is still not reacting to sound, here is what to do. Double click the speaker icon on your system tray (bottom right corner of your screen) Select "Options" then "Properties" then "Recording" and click "OK" Make sure the checkbox for "Microphone" is checked. You can select any recording source you want flash to display. If you use Wav data (like from your mp3 player) you will want to also right click on the flash player and click the echo suppression option for the microphone.