Hi Josh, I'm sorry to hear you are having trouble using the XACT tool.

What might be a better solution for you is to use the new SoundEffect and Song API that we are adding for our v3 release. This is not based on the XACT tool, so you can just add .wav, .mp3, or .wma files directly to Visual Studio, then load and play them from your C# game code.

This API will be officially shipping in v3 (available this fall) but if you want to experiment with it before then, a subset of the new functionality will be included in our Zune CTP release (precise date tbd: you can watch the team blog on http://blogs.msdn.com/xna for the announcement when this is available).