In the notification area, Volume is listed as 'past item' and
appears to be in a folder. How can I restore it to 'current
item' so I could get my sound back. I already checked
'place volume icon on taskbar' and 'always show' but neither
of them worked.

Additional details:

Under msconfig, the following has stopped running:
-Windows user mode driver
-volume shadow copy
-universal plug and play

I have C-Media AC97 and Realtek AC97.