Are you using the Dell supplied sound drivers? I do a lot of support on the Dell users forum and we have found that not using the Dell sound drivers can cause problems in some systems.
Dell does not support Win 7 (no Win 7 drivers) for the XPS420 however they do support Vista and the Vista drivers should work without problems. The Vista SigmaTel driver is HERE
If you have anything other than the Dell SigmaTel driver, suggest you uninstall whatever you have and install the Dell SigmaTel driver.
FYI the Dell users forum can be accessed http://en.community.dell.com/
You may want to check out the support forums.