Edit:
It seems that upgrading to patch 1.2 solved this movement problem. However I still have the issue of sound completely stopping after playing the game a while. This seems to mainly happen after I hit escape and pause the game most of the time.
Edit: It also happened in the middle of playing the game. Just total sound drop out. Going back to the Win 7 desktop, sound works fine.
Another update:
When sound stops working, if I alt-tab to the desktop and create any sound with the PC (like opening the sounds control panel tab and playing one of the default window sounds) and then alt-tab back into the game, sound starts working again.