After numerous attempts and many wrong turns I finally have audio working on Fedora 10 at work and Fedora 11 here at home.
I use the KDE version and could never get the microphone to record clear audio. I could also never hear audio from any flash movies played within the browser.
Well the key to the puzzle was that I was fiddling with KMix, the KDE audio mixer. This had very little effect. I recently discovered the Pulse Audio Volume Control application and this has solved my problem. By manipulating the audio settings via the Pulse Audio Volume Control I now have perfectly working audio.
/usr/bin/pavucontrol in the pavucontrol RPM.