iMac Sound

So I recently purchased (with the help of my family) a new iMac 10.6.3 for college. It's been about four days since it's been installed and has been going fine until today.
I was looking at a video for school and didn't know the sound was completely max until I played music and heard it was full blast. I didn't think much of it, but I don't know if that has any relation to what my computer started doing next.
I noticed the sound coming off and on and thought it was my music, maybe downloading some messed up songs. But it started doing it to music that was perfectly okay earlier.
I went into the System Preferences and saw that - without any headphones or anything plugged in - my 'Play sound effects through' option was - and still is - constantly flipping from headphones to digital out (which both play no sound) to internal built (I think). But now it's only flipping through the no sound options.
I don't really know what could be wrong with this new computer and want to know if anyone can help diagnose this.