Hi Nick,
Just to clarify, XACT is a high-level audio playback engine and tools, handling things like asset compression, bundling, streaming, notifications, etc., as well as higher-level concepts like non-repetitive sound effects and dynamic music. XACT sits on top of XAudio2 on both Windows (Vista and XP) and Xbox 360, which is a low-level audio engine that handles things like format conversion, decompression, mixing, etc. XAudio2 in turn sits on DirectSound (Windows XP), the core audio APIs you referred to (Vista), and on the low-level audio hardware driver (Xbox 360).
The core audio APIs on Windows Vista, while very powerful and flexible, tend to require the programmer to implement even the most basic elements of signal routing, mixing, decompression, etc. They're quite effective for someone writing a software mixer or their own ground-up audio engine, so I suspect that in the game space they'll be of primary interest to middleware and proprietary sound engine developers.
I'd certainly recommend checking out XAudio 2 (haven't seen too much discussion yet on this forum, though if you encounter bugs or product suggestions, the XAudio 2 beta site has a form you can fill out) depending on your title's ship schedule. Thanks for the inquiry!
Cheers,
Scott