I can barely hear the background noises like birds singing and the inn music or not at all.
When I alt-tab out of the game and come back in the game, then the ambient sound is loud and I can hear it perfectly. But only temporary because if I open the character sheet or open the inventory screen then I lose the sound again. Any ideas?

Turn off EAX? ("Environmental Audio" - it never worked that well for BG back in the day either. Alternatively you might need Creative Alchemy to get it working in Win V/7)

FYI, the sounds are supposed to be dampened in the Inventory screen, etc. When you return to the world they should become loud again.