Alright - final post in this thread on this problem; I'll be filing a bug report and letting Claesson-Edwards take it from here.
FWIW - I got it working. I enabled (via WinPatrol) Breakaway starting with my system and rebooted. Got an error message: "Error starting audio engine: Child Process not responding". Cancelled out of Breakaway and shut it down. Restarted it. Got the "Audio backend is active" error with this additional info: Input: 44099.99 (the decimal part was dropping slowly), Output: 47999.50 (decimal dropping quite quickly). Underruns=0, Overruns=0, Resets=0". I used the wizard to go into SafeMode and set the buffer to "large" and it started working. Stopped everything, re-ran the wizard and set it to (for want of a better way of putting it) Regular processing and a medium buffer and the sound was garbled (though identifiable through the distortion). Shut down my media player, re-ran Breakaway's wizard and all is now well...
Like I said, I am about to copy and paste this and my previous post and shift this problem to Claesson-Edwards, but thought I'd post here for posterity

WinXP Pro Sp-3, Centrino Single Core 1.4Ghz, 2GB RAM, SigmaTel Audio (integrated).