If you've just downloaded the game it should be fully patched to the last version released by Ubisoft.
The game's native aspect ratio is 4:3 so running it in fullscreen on a widescreen monitor will stretch out the graphics. There are some widescreen mods being worked on in the SH3 Mods Workshop forum if you want to look into those.
You can also try using the Res_Fix mod, which is available here:
http://www.subsim.com/radioroom/down...o=file&id=1092
I'm using this to run the game at a res of 1400x1050 - I have a 1680x1050 monitor. I didn't like the stretching either so I tweaked my vid card settings so there's no auto-scaling of the game to fill the whole screen even in fullscreen mode. The game runs at the proper aspect ratio and I have vertical black bars on either side which I prefer to to the stretched graphics.
I don't know about the sound issues, sorry - but someone else will probably have some suggestions. Posting your computer specs may prove helpful in that regard.