I updated to latest version of Flash Player, 11.3.300.270 and now it plays only the first 5-10 seconds of video, no audio. This happens on all websites an videos. This is on windows XP32 and IE8 browser.
I've actually experienced the same thing on a couple of Windows XP 32-bit computers of mine with all audio output devices disabled, and I have the latest version of Flash Player 11.3. Especially on youtube for example, you play a video for about 5-10 seconds with all audio output devices disabled, the video pauses automatically by itself and doesn't play further unless you move the seek bar/button.
Please try the steps outlined in this FAQ to see if they help: