Somehow my iPhone Simulator is unable to play sounds. First an app I'm working on using AudioServicesPlaySystemSound() stopped working.. I spent a while debugging this but sound is still working on the iPhone when I run the app on the device. I get the same results with other iPhone apps such as the sample Crash Landing app.
I can't find a sound setting anywhere in the simulator or Xcode preferences. I've tried resetting the simulator through "Reset Content and Settings" menu item to no avail.
On your Mac, go to System Preferences > Sound > Sound Effects and then uncheck and recheck "Play user interface sound effects".
You need to re-activate your system sounds, see the end of this page.