The current implementation of Media playback is expecting the audio file to have been unpacked to Isolated Storage, which was the case on WP7 when this code was written.
Currently it is not possible to play a file that is packaged as a resource.
We need to implement reading the file from stream in order to address this.
StreamResourceInfo fileResourceStreamInfo = Application.GetResourceStream(new Uri("www/sound1.wav", UriKind.Relative));
SoundEffect soundEffect = SoundEffect.FromStream(fileResourceStreamInfo.Stream);