Here's the setup:
1. Win XP running the latest version of VLC (.85, I think)
2. Axis 210A Camera
Here's what I did:
1. Went to Settings>Preferences
2. Under Stream Output>Sout Stream>Transcode I entered the following:
a. 1, instead of 0 for the audio channels
b. 44100 for the audio sample rate
c. I also selected synchronise on audio track
Now when I transcode the MP4 stream as follows (using File>Open Network Stream, RTSP, and the following for the URL: rtsp://IPAddress/mpeg4/media.amp):
:sout=#transcode{vcodec=mp4v,vb=1024,scale=1,acodec=mp4a,ab=192,channels=2}:duplicate{dst=display,dst=std{access=file,mux=mp4,dst="H:\vlc\teststream1.mp4"}}
Not only can i hear the audio while I transcode, but when I play the saved stream I can hear the audio as well.