From what you describe, it's definitely not working right on your system. You should be hearing the sound that's in the video. It's a recording from the sim when running. Does this FAQ help?

http://www.inertiasoft.com/fsonefaq/#Q1014-FS1

We've found that it might be necessary to test out each step in the sound control panel (the steps shown in the screen grab w/ the FAQ - "Hardware acceleration" slider).

The electric motors sound normal because we use one sound file for those. For gas/glow engines we mix sound files, and if there's going to be a problem ... it's heard when the sounds are mixed.

Michael