XBMCBuntu

So I built and installed a XBMCBuntu system for our 2nd htpc. It is a pretty basic machine: pentium D 2.8 dual core, 2gb ram, 16bg flash drive, & an evga Geforce210.

Installation went smooth. I then went into Ubuntu and updated to latest nvidia drivers via Sudo. I am a complete noob in linux, and just did some googling to stumble my way thru it. It worked because I can see the latest Nvidia version in the settings in Ubuntu.

Now accessing my shares via SMB was a breeze, works flawlessly. Only issue I am having is when I try to play a movie or song, sometimes I get the dreaded "failed to initiliaze audio device, check your settings" error. Or sometimes I dont get that error, but still no sound is coming out. I have tried pressing the 'M' key to make sure it is not on mute.
One solution I found on here was to go into the audio settings and enter the following:
Audio output:Analog
Audio output device:Custom
Custom audio device: hdmi:CARD=NVida

Now, this works sometimes, sometimes it does not. I found that if I change the output to HDMI, then back to Analog, and then reboot the system, it sometimes works. At least, it works for a few hours, then I get the same error again.

Any suggestions?

I will emphasize once again, that I am a complete noob in linux, so any step by step help will be GREATLY appreciated.