1) After you recompile the kernel it is generally a good idea to reinstall alsa

2) Try getting the newest alsa-drivers alsa-lib and alsa-utils from www.alsa-project.org, the newest is currently 1.0.0.rc2, when rc1 came it had a bugfix for your specific chipset, that might be it?

3) When installing the drivers remember to specify the card type ex:
'./configure --with-cards=intel8x0 --with-sequencer=yes;make;make install'

4) www.alsa-project.org has all the nessesary info on getting this particular chipset to work

Well, I have installed 1.0 rc1 with just /configure && make && make install and then ran alsaconf. It worked ok.
Does it make a difference from doing

./configure --with-cards=intel8x0 --with-sequencer=yes

I have to say that, though the card works, i am not satisfied with the sound quality. Using alsamixer, if I put the PCM volume channel too high, there is a lot of craking noise. Not too good...

I am definetly going to go through the doc on the alsa site and try to improve the quality..

Thanks for posting tips kadaver
L