Problem has returned, though with a slight variation. The problem is as described, but only if playback is paused when the sound is turned down or muted. I.e. squence of events is:-
* Music is playing
* Someone calls on Skype (or presumably other comms app)
* Windows 7 turns the music down or mutes it (depends on settings)
* I pause the now silent music so as not to miss tracks
* Conversation on Skype runs until complete
* Windows 7 turns the volume back up, but nothing is heard

* I open the volume mixer
* Click on the slider labelled MM without moving it
* Music returns at correct volume

Ok, having waited until 3.2 came out, and tested on that before reporting the bug, I now find it's gone away! Not sure why it failed this morning, but I'm guessing that some dll or other was still cached from 3.1.1, which at least has consistently had the bug. Anyhoo, it's gone away so "well done" to the fixers who got to it.

Windows 7 has a feature that can reduce the volume or mute media players when communications activity is detected. The volume reduction bit works fine, so if I get called on Skype my music is automatically muted, however when the conversation is finished it's supposed to turn it back up again. The volume control in the volume mixer returns to position but the sound doesn't come back. If I click (not move, just click) on the volume slider for the app then the sound returns. Note this only happens with mute, if the sound is set to 80% reduction then it returns correctly.

This happens on MM 3.2, but also happened on MM 3.1.1