its a acer 2700 laptop its only a few months old
If it's that recent, I would take it back to either the retailer or the OEM - should be under warranty.
I also think this is not a case of updating drivers because the system is new.
But, you can give reloading the hardware and drivers a shot.
Through the Control Panel > System > Hardware tab, Device Manager > expand Sound, Video, and Game Controllers. Delete the Sound Card - right click menu - and reboot. XP will re detect and reinstall the hardware.
BTW, is there a yellow question mark next to it?
Regards - Charles