Audio is new in Baby X. There are currently two interfaces, one for playing MP3 data, and one for playing raw PCM samples. Currently it only works on Windows and hasn't been integrated into Baby X properly. The code is in the file audio.c under the "Windows" directory. The Windows sound playing routine doesn't seem to like anything except 44100MHz stereo samples.
You will need the BabyX resource compiler to get the data into memory. This simply writes out the PCM samples given a .wav or .aiff file. If you pass a .mp3 file to an "<audio>" tag, it will decompress it to raw pcm data. This is probably not what you want for Baby X as BabyX will support playing of mp3 data directly. It's provided mainly for other users of the rsource compiler. You probably want to package .mp3 data with the <binary> tag.
Experiments with my own computer have shown that playing anything other than 44100 MHz stereo is difficult. So you will need to use the BabyX resource compiler's samplerate setting if your original data is in another format.This restriction might be removed if we can coax Windows into being more accommodating.