A big thanks to Ed Bott for pointing to the new Volume Mixer that comes with Vista. This will probably become one of those unsung improvements that will become a part of everyday use and we’ll wonder why it wasn’t always like this – independant volume control on a per application basis.
Now if they could just make the context menu for it a little more dynamic so you could adjust the volumes from it instead of having to open the applet … maybe next time huh 
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Just click the speaker icon in the tray! Then click Mixer. Two clicks, and there you are.
But Ed .. that’s TWO clicks
a dynamic context menu would be one .. well one and a couple sliders anyway. If they can do it in Explorer for the View menu item it shouldn’t be that hard eh 