I have all three types of Sequence files: Sequence files with Midi only, Sequence files with Audio only, and Sequence files with Midi and at least one Audio Track. So far, this problems seems to exist with all three types of files.
In the MME Audio Out Driver section, I have three choices 1) the IDT driver, 2) Microsoft Sound Mapper, and 3) Creative XFi driver. Currently it is set to Creative XFi driver.
In the MME Midi Out Driver section, I have two choices: 1) Microsoft Midi Mapper, and 2) Microsoft GS Wavetable Synth. Currently it is set to Microsoft GS Wavetable Synth.