Problem: Browsers lack good, consistent native audio support. (HTML 5's Audio() is the future, but is still in development.)
Solution: Javascript API using HTML5 Audio() + headless Flash via ExternalInterface, works almost everywhere. If HTML5 is supported but "non-free" MP3/MP4 formats are not, flash can be used as a fallback.
SoundManager 2 wraps and extends both the HTML Audio and Flash Audio APIs, providing a single, unified sound API to Javascript; the API is consistent regardless of the technology working under the hood to play sound. (The flash portion is hidden, transparent to both developers and end users.)