I am going to mark this one as solved, with a few caveats.
Basically the sound is off by design on the assumption that you would not want several different VM's running at the same time making sound.
So OK that makes sense but it is possible to get sound to work with virt-manager.
The easiest way is to use AC97 sound as the sound device in virt-manager and if your client supports AC97 it should work.
There are other ways to get it to work depending on what your doing.
I did not try the other methods so I am not going to go over them.
Suffice to say this shows up as a bug report every so often on the assorted virt-manager bug reporting sites here is an example.
https://bugs.launchpad.net/ubuntu/+s...rt/+bug/591489
So I consider this a limitation of virt-manager which may or may not concern the individual user. For me it again depends virt-manager has some nice features but for certain applications it will not work. I have experienced this with both VIrtualBox and AQEMU. So far the most flexible seems to be KVM/libvirt/QEMU and the command line or scripts. That is still a bit of a pain. Hopefully the AQEMU maintainer will update at some time but it seems to be a dead project. It is open source and written in QT4 so maybe it will get picked up by someone. I noticed that someone at RedHat has fixed a bug as recently as this year.
On a side note I was having problems with the icons in virt-manager but an install of kde-gtk-config and selecting GNOME as the Icon Theme fixed that.