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Originally Posted by Electrolyte
Problem solved, it's Creative's latest driver
UT2004 with full EAX support and using Creative's OpenAL driver there isn't a problem at all.
When Creative get back to me I'll have to tell them they have stuffed their latest driver for UT2004 users 
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Wouldn't be the first time a brand new set of drivers have fouled up for a particular game. At least it's stable now until they put a revised set of drivers out.