On Multiplayer everything you place sounds like a solid block.

Cannot reproduce.

What plugins has the server running ?

Please force a crash by pressing F3 + C for 10 seconds while ingame and attach the crash report here.

Minecraft Crash Report ----
// Oops.

Time: 17/03/13 09:56
Description: Manually triggered debug crash

java.lang.Throwable
at net.minecraft.client.Minecraft.l(SourceFile:1162)
at net.minecraft.client.Minecraft.K(SourceFile:572)
at net.minecraft.client.Minecraft.run(SourceFile:524)
at java.lang.Thread.run(Unknown Source)

A detailed walkthrough of the error, its code path and all known details is as follows:
---------------------------------------------------------------------------------------

– Affected level –
Details:
Level name: MpServer
All players: 1 total; [bdp['MacDarach8810'/29965, l='MpServer', x=-595.11, y=65.62, z=14.47]]
Chunk stats: MultiplayerChunkCache: 275
Level seed: 0
Level generator: ID 00 - default, ver 1. Features enabled: false
Level generator options:
Level spawn location: World: (-801,75,185), Chunk: (at 15,4,9 in -51,11; contains blocks -816,0,176 to -801,255,191), Region: (-2,0; contains chunks -64,0 to -33,31, blocks -1024,0,0 to -513,255,511)
Level time: 295581708 game time, 300769938 day time
Level dimension: 0
Level storage version: 0x00000 - Unknown?
Level weather: Rain time: 0 (now: false), thunder time: 0 (now: false)
Level game mode: Game mode: survival (ID 0). Hardcore: false. Cheats: false
Forced entities: 8 total; [qc['Chicken'/29966, l='MpServer', x=-590.63, y=64.00, z=17.66], qi['Sheep'/29976, l='MpServer', x=-672.53, y=-484.77, z=30.13], qi['Sheep'/29972, l='MpServer', x=-666.19, y=57.00, z=13.53], bdp['MacDarach8810'/29965, l='MpServer', x=-595.11, y=65.62, z=14.47], ro['Creeper'/29975, l='MpServer', x=-594.50, y=51.00, z=89.50], qh['Pig'/29968, l='MpServer', x=-623.13, y=55.00, z=60.88], ro['Creeper'/29969, l='MpServer', x=-617.50, y=55.00, z=-35.50], qh['Pig'/29971, l='MpServer', x=-571.94, y=66.00, z=56.13]]
Retry entities: 0 total; []
Stacktrace:
at bdm.a(SourceFile:282)
at net.minecraft.client.Minecraft.b(SourceFile:1879)
at net.minecraft.client.Minecraft.run(SourceFile:533)
at java.lang.Thread.run(Unknown Source)

– System Details –
Details:
Minecraft Version: 1.5
Operating System: Windows 7 (amd64) version 6.1
Java Version: 1.7.0_07, Oracle Corporation
Java VM Version: Java HotSpot(TM) 64-Bit Server VM (mixed mode), Oracle Corporation
Memory: 288105448 bytes (274 MB) / 522780672 bytes (498 MB) up to 954466304 bytes (910 MB)
JVM Flags: 2 total; -Xms512m -Xmx1024m
AABB Pool Size: 17641 (987896 bytes; 0 MB) allocated, 2 (112 bytes; 0 MB) used
Suspicious classes: No suspicious classes found.
IntCache: cache: 0, tcache: 0, allocated: 3, tallocated: 63
LWJGL: 2.4.2
OpenGL: ATI Mobility Radeon HD 4250 GL version 3.2.9712 Compatibility Profile Context, ATI Technologies Inc.
Is Modded: Probably not. Jar signature remains and client brand is untouched.
Type: Client (map_client.txt)
Texture Pack: Default
Profiler Position: N/A (disabled)
Vec3 Pool Size: 942 (52752 bytes; 0 MB) allocated, 19 (1064 bytes; 0 MB) used

Looks clean.

(you should update, you have Java 7U7, current is Java 7U17, but that has nothing to do with the sound issue).

Again the question: Vanilla or bukkit server ? What plugins ?

Incomplete.