So nothing happens. Tell xmms to use esound in the Output Plugin box, and your music should happen again. Problems with sound in general are sometimes due to the sound card driver being used. This is well outside the scope of this FAQ, alas. If it can't find out, it will keep asking until it times out after a minute or so.
Some people report success with adding the machine name at the end of that line, separated by a tab.
Others find this doesn't help. Please take a few minutes to investigate and then send it in. If you have an oldish package, it is worth checking the announcements for newer packages to see whether it's been fixed. Follow the directions from there.