Simply installing 7 and seeing XP added in as a boot option wouldn't account for the loss of sound in XP. Creative drivers and XP are already known for seeing problems there especially with the WDM in particular.

Likely when going to boot into XP following the 7 install something else likely loaded sideways knocking sound out. You may have to remove the drivers for the onboard sound or disable that in the Device Manager as well as in the bios in order for Windows to properly detect the sound card and see all drivers go on fully for that. Often while you have that off in the bios the registry is still trying to see them loaded.