Sound is not working at all - Ubuntu 7.0.4 - intel 82801CA-ICH3

Hi,
I recenetly reinstalled Ubuntu 7.04.
At first, sound worked fine.
After I installed all the updates (through the update manger), sound stopped completely, even though the sound card is recognized OK.

The reason I reinstalled it was because the sound went dead the first time, and after I tried several suggestions (the last one included reinstalling the alsa package), I also lost GUI (and since I am quite a NB, I did not know what to do except for reinstalling UBUNTU)

Hardware details:
IBM thinkpad T23. PIII 1000MHZ cpu.
sound card - intel 82801CA-ICH3

aplay -l
**** List of PLAYBACK Hardware Devices ****
card 0: I82801CAICH3 [Intel 82801CA-ICH3], device 0: Intel ICH [Intel 82801CA-ICH3]
Subdevices: 1/1
Subdevice #0: subdevice #0

lspci -v
00:00.0 Host bridge: Intel Corporation 82830 830 Chipset Host Bridge (rev 04)
Subsystem: IBM ThinkPad A/T/X Series
Flags: bus master, fast devsel, latency 0
Memory at d0000000 (32-bit, prefetchable) [size=256M]
Capabilities: <access denied>

00:01.0 PCI bridge: Intel Corporation 82830 830 Chipset AGP Bridge (rev 04) (prog-if 00 [Normal decode])
Flags: bus master, 66MHz, fast devsel, latency 96
Bus: primary=00, secondary=01, subordinate=01, sec-latency=64
Memory behind bridge: c0100000-c01fffff
Prefetchable memory behind bridge: e0000000-ebffffff

00:1d.0 USB Controller: Intel Corporation 82801CA/CAM USB (Hub #1) (rev 02) (prog-if 00 [UHCI])
Subsystem: IBM ThinkPad A/T/X Series
Flags: bus master, medium devsel, latency 0, IRQ 11
I/O ports at 1800 [size=32]

00:1d.1 USB Controller: Intel Corporation 82801CA/CAM USB (Hub #2) (rev 02) (prog-if 00 [UHCI])
Subsystem: IBM ThinkPad A/T/X Series
Flags: bus master, medium devsel, latency 0, IRQ 11
I/O ports at 1820 [size=32]

00:1d.2 USB Controller: Intel Corporation 82801CA/CAM USB (Hub #3) (rev 02) (prog-if 00 [UHCI])
Subsystem: IBM ThinkPad A/T/X Series
Flags: bus master, medium devsel, latency 0, IRQ 11
I/O ports at 1840 [size=32]

00:1e.0 PCI bridge: Intel Corporation 82801 Mobile PCI Bridge (rev 42) (prog-if 00 [Normal decode])
Flags: bus master, fast devsel, latency 0
Bus: primary=00, secondary=02, subordinate=08, sec-latency=64
I/O behind bridge: 00002000-00006fff
Memory behind bridge: c0200000-cfffffff
Prefetchable memory behind bridge: f0000000-f7ffffff

00:1f.0 ISA bridge: Intel Corporation 82801CAM ISA Bridge (LPC) (rev 02)
Flags: bus master, medium devsel, latency 0

00:1f.1 IDE interface: Intel Corporation 82801CAM IDE U100 (rev 02) (prog-if 8a [Master SecP PriP])
Subsystem: IBM ThinkPad A/T/X Series
Flags: bus master, medium devsel, latency 0, IRQ 11
I/O ports at 01f0 [size=8]
I/O ports at 03f4 [size=1]
I/O ports at 0170 [size=8]
I/O ports at 0374 [size=1]
I/O ports at 1860 [size=16]
Memory at 50001000 (32-bit, non-prefetchable) [size=1K]

00:1f.3 SMBus: Intel Corporation 82801CA/CAM SMBus Controller (rev 02)
Subsystem: IBM ThinkPad A/T/X Series
Flags: medium devsel, IRQ 11
I/O ports at 1880 [size=32]

00:1f.5 Multimedia audio controller: Intel Corporation 82801CA/CAM AC'97 Audio Controller (rev 02)
Subsystem: IBM ThinkPad T23 (2647-4MG) or A30/A30p (2652/2653)
Flags: bus master, medium devsel, latency 0, IRQ 11
I/O ports at 1c00 [size=256]
I/O ports at 18c0 [size=64]

01:00.0 VGA compatible controller: S3 Inc. SuperSavage IX/C SDR (rev 05) (prog-if 00 [VGA])
Subsystem: IBM ThinkPad T23 (2647-4MG)
Flags: bus master, 66MHz, medium devsel, latency 64, IRQ 11
Memory at c0100000 (32-bit, non-prefetchable) [size=512K]
Memory at e8000000 (32-bit, prefetchable) [size=64M]
Memory at e4000000 (32-bit, prefetchable) [size=64M]
Memory at e0000000 (32-bit, prefetchable) [size=32M]
[virtual] Expansion ROM at e2000000 [disabled] [size=64K]
Capabilities: <access denied>

02:00.0 CardBus bridge: Texas Instruments PCI1420
Subsystem: IBM ThinkPad T23 (2647-4MG)
Flags: bus master, medium devsel, latency 168, IRQ 11
Memory at 50000000 (32-bit, non-prefetchable) [size=4K]
Bus: primary=02, secondary=03, subordinate=06, sec-latency=176
Memory window 0: f0000000-f3fff000 (prefetchable)
Memory window 1: c4000000-c7fff000
I/O window 0: 00002000-000020ff
I/O window 1: 00002400-000024ff
16-bit legacy interface ports at 0001

02:00.1 CardBus bridge: Texas Instruments PCI1420
Subsystem: IBM ThinkPad T23 (2647-4MG)
Flags: bus master, medium devsel, latency 168, IRQ 11
Memory at 51000000 (32-bit, non-prefetchable) [size=4K]
Bus: primary=02, secondary=07, subordinate=07, sec-latency=176
Memory window 0: f4000000-f7fff000 (prefetchable)
Memory window 1: c8000000-cbfff000
I/O window 0: 00002800-000028ff
I/O window 1: 00002c00-00002cff
16-bit legacy interface ports at 0001

02:02.0 Communication controller: Agere Systems WinModem 56k (rev 01)
Subsystem: AMBIT Microsystem Corp. IBM ThinkPad T23 (2647-4MG)
Flags: bus master, medium devsel, latency 0, IRQ 11
Memory at c0201000 (32-bit, non-prefetchable) [size=256]
I/O ports at 6440 [size=8]
I/O ports at 6000 [size=256]
Capabilities: <access denied>

02:08.0 Ethernet controller: Intel Corporation 82801CAM (ICH3) PRO/100 VE (LOM) Ethernet Controller (rev 42)
Subsystem: IBM ThinkPad A/T/X Series
Flags: bus master, medium devsel, latency 66, IRQ 11
Memory at c0200000 (32-bit, non-prefetchable) [size=4K]
I/O ports at 6400 [size=64]
Capabilities: <access denied>

I want to emphasize that out of the box, sound is working perfectly OK. Only after I install the updates, the sound is disabled. I believe it is a result of one of the latest kernel updates.

I tried all the suggestions showed in http://ubuntuforums.org/showthread.php?t=205449 and also tried to re-install the alsa package.

I am a NB in linux (so please, be very clear with your suggestions).
Thanks,

Hagai