Last night I updated Ubuntu-Linux 2.6.31-generic to Ubuntu 10.04'Lucid Lynx'.
I find that I am not able to play CD's, nor hear music from youtube.
I have perused the Synaptic Pkg Mgr, and everything seems to be in order for sound. Any ideas?

Best check which chipset ('lspci') is used and check which drivers are loaded for it ('lsmod') and check if the kernel spits out any errors right after booting ('dmesg').

My Acer Aspire ZG5 Netbook running Ubuntu 10.04 LTS for reference purpose only

Sound works including mic.

I have an Acer Aspire One netbook and I can tell you the speaker on it sux beyond compare, so I disabled it. I'm going to do the same with my Asus Eee 701SDd as well, which is almost as dismal. Honestly, they should've left speakers completely out of these altogether. On the Aspire One, the speaker, as I recall, is next to the hard disk, causing vibrations which tend to harm the drive. It also has very little volume. The headphone jacks work just fine, and even a $5 plug-in stereo mini-spkr set works way better than the crap unit built-in. Your particular unit/model may be different, but in my experience, don't count on it. I wouldn't mind hearing from others who've used their built-in speakers satisfactorily.

I have my speaker muted, but I do plug in with earplugs when I want sound, maybe twice in the past couple years. This, of course, requires un-muting the speaker when needed. I might cut the spkr wires to eliminate the built-in unit, leaving the jacks connected directly, as this will negate the need to keep spkrs muted. The only reason to mute or disable them is due to the problems associated with the hard disk and vibrations. Not a problem on the SSD units, although the built-in units I've seen all sucked.