The answer to my question was found on this URL.
 
http://www.wings-of-valor.org/
 
Look under the Documents Link.
 
Its called: XP Workarounds (by Brooks Martin)
 
Here is what he said... And I quote:
 
Workarounds for XP/USB joystick/missing sound.
Collected by Brooks Martin, March 10, 2002
bkmart@hotmail.com
The Problem:
 
Red Baron and Windows XP don’t get along with regards to sound. As XP
users with USB joysticks soon discover, the program works fine the very
first time they play. Subsequent play is marred by the complete absence of sound. Players with old-style, gameport joysticks, don’t usually have this problem. Unfortunately, USB joysticks are the only ones commonly found in stores now.
 
This problem appears to be related to Red Baron mis-analyzing the
computer’s hardware. Specifically, RB seems to think there is a conflict
between the USB joystick and the soundcard. For subsequent play events,
RB disables sound; perhaps thinking that of the two, users would rather have an operable joystick. Since both joystick and sound worked fine the first time, clearly the RB-discerned conflict is imaginary, though real enough to RB, alas.
 
Workarounds:
I call these workarounds, rather than solutions, since they involve more-orless inconvenient actions by the player. You can have both sound and USB joysticks. You just have to decide which of the following workarounds is less onerous to you.
 
Several people in the RB community are responsible for developing these
workarounds, including McHaggis, AATrouble4you, Charles de Thielt, and
myself. I am sure there are others that helped, and I will gladly add your
names to this list if you will notify me.
 
Hardware workaround:
Unplug the USB cord of your joystick before starting RB. Plug back in once
you reach the RB main menu. You may hear a chime sound from your
computer, signifying it has recognized the “new hardware,” namely, your
joystick. Make your selection from main menu and go fly, with both joystick and sound. If your joystick has an electric cord also (Microsoft Force Feedback, for instance), you needn’t unplug that cord.
Advantage: You retain your preferences data files (see below).
 
Disadvantages: Inconvenient location of USB port. Wear and tear on USB
connector.
 
Software workaround #1:
Delete “rbprefs.dat” from your “Sierra/RedBaron3D/Data” subdirectory
before each play of RB in single player mode.
Delete “mpprefs.dat” from your “Sierra/RedBaron3D/Data/Multi”
subdirectory before each play in multiplayer mode.
This also works for the older, superpatched, RedBaronII game, just
substitute RedBaronII for the RedBaron3D name when searching for the .dat files.
 
Advantage: Saves USB connectors.
 
Disadvantages: You will have to re-select all your preferences each time you play. You have to erase .dat file each time.
 
Software workaround #2:
After deleting the .dat files as above, make new, empty file folders in the
same subdirectories with the .dat names. In the /Data subdirectory, make a folder named “rbprefs.dat” (the .dat is required). For multiplay, in the
/Multi folder make a new folder named “mpprefs.dat”.
Again, this works for the older RBII version, per above.
 
Advantage: Only have to do this once.
 
Disadvantage: Re-entering preferences each time you play.
 
 
 
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Could this forum update the Uncompatable with XP status with this info?
 
Thanks!
 
MR2spyder

I had the same problem but took a slightly different approach. I created a DOS Batch file to replace the corrupted file (rbprefs.dat) with a fresh file each time the program is loaded.
 
I also have a force feedback joystick, but the force feedback no longer works. Which data file keeps this information?
 
Thanks,
Mark