Thanks for those infos, and as Megaman X has said there were multiple sound deamons running in my system. There was this sound server (artsd) starts with the KDE (kde apps may be using this daemon), and my xmms was using ESounD output plugin 1.2.7 (using esd daemon).
Other than ESD plugin, my xmms comes with the option to have the following output plugins - arts driver 0.4, disk writer plugin 1.2.7 and OSS driver 1.2.7
I couldnt find what the last 2 plugins been attached to or what its special purpose.
ESD sounds good in its description - it says it can mix several audio streams through a single audio device at a time so that apps wont have to wait to use the sound card (a nice choice most of the time!) But the sad thing is i think it is not a default one with the apps. Now i have noticed an option to use this ESD with a couple of apps.
Anyway now i have given the option not to start artsd with kde in the artsd preferences section i sneaked out in the redhat control center, as i have decided to stick with ESD
[ I still think there must be some mechanism in which sound device should be unavailable to any other apps when it is been allocated to a particular application so that other applications should start with no audio o/p, because i dont like the 'delayed o/p' as with 'arts' and the 'mixed o/p' as with ESD wont be feasible sometimes.]