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Go to your kde control center and choose multimedia -> sound systems

in the material tab, select your material (probably it will work with the alsa drivers, depending on your soundcard). Go back to the generic tab and click the test sound button. If you hear a sound, everything is ok, else, try out another driver from the list until you hear a sound (perhaps aRts?).

Once you got that, save your settings and reopen your mixer.

Quoted

ok first off the two tabs are called 'general' and 'hardware'

Sorry, this was freely translated from my french version of KDE, I was too lazy to change to an english desktop

This is strange in fact... have you completely closed kmix between your changes? (If there's the kmix icon in the taskbar, rightclick it and click on "Quit". After the change, launch kmix again - it will not take over any changes while running.

Perhaps you might also have to relaunch your sound system, even if kde does that for you it happens that changes are not applied (strage behaviour I encountered some time ago).
In your /etc/init.d you will probably find a soundserver script. On my gentoo it's called alsasound, no idea what they call it in Debian systems, but the name might be obvious. Just type in a console:

replace alsasound by whatever your script is named.

If this does not help, it could be a Devian specific bug - have you checked out Debian's buglist?

I didn't even think of... but I ought know that, as I had the same problem on a machine some time ago