>I personally lean toward #1. Oh, and anyone with other observations,
>suggestions on this please feel free to chime (haha) in.

I think what you have described with your sounds is actually the way the
System functions, although it may not be the preferred way.

There is software--Sound Source, Detour, Sound Output; see Version
Tracker (www.versiontracker.com)--that can selectively direct the sound
from multiple inputs to multiple outputs (e.g., external speakers and not
the Mac's speakers for alerts, but to external speakers for iPod/iTunes).
 This would resolve your problem if it is indeed not a bug.

--Ira




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