I still have the same problem. I have updated the Logitech software and downloaded a DirectX driver. I still can't hear any sound when the camera is plugged in. Any suggestions?

Many webcams come with a build-in microphone and a pretty bad driver to operate it. It shouldn't knock out your normal playback and just get the MME "recording line" for the mic (which is bad enough if you use a headset frequently), but sometimes it appears to the system as a complete audio device (including playback), thus disabling Windows audio.

Suggestion: Check Control Panel -> Audio devices --> Audio tab if your selected playback device is your soundcard. If not, change it.
If that doesn't help, go to Device Manager and look for a "USB audio device" or similar. Then deactivate it. You cannot use the cam's microphone then.