The ACE faq does mention how to do this http://dev-heaven.net/ezfaq/show/ace-mod?faq_id=17.
Rocko should have mentioned the file was ace_clientside_config.hpp, located in the Dta/ACE folder of
your ArmA game. I'll take a look at adding that detail for him in the faq when I have time.
As far as Xam - dunno, don't use that one.
Deleted the line #define ACE_OVERRIDE_BIS_SOUNDS in the ace_clientside_config.hpp and can now use third party sound mods.
Thanks for the tip and the quick reply.
Hope this helps anyone else with the same problem.