By using a TLC7528 dual DAC IC, electronics enthusiast Amanda Ghassaei has demonstrated methods of creating stereo audio output from an Arduino board. A much better solution than using R-2R ladders unless cost is a vital issue, and apart from generating sine waves and so on Amanda continues with various experiments, explanations of theory and much more. Once again a very good read if you're interested in sound effects or function generation with Arduino.
If you're interested in working with Arduino and sounds for various reasons we have a neat little SOUND: sound and buzzer module:
It can be used as a noise-maker driven by your microcontroller for audible feedback of events, and it can also be used as a knock-detector input to sense events and react to them. Includes a built-in 1M resistor to allow the piezo element to detect shocks. For more information and to order, please visit the product page here.