No, the original error I had was using the built-in audio.

Yesterday I built a USB cable so that I could plug in a dongle like the one you pointed out. I had purchased three from dealextreme.com, and one of them I was able to get working well with my Yaesu VX-7R and Ubuntu laptop running soundmodem and Xastir.

I plugged it into the N800, and it looked like the kernel recognized it... it created /dev/dsp1 for instance. I configured soundmodem to use soundcard mode on /dev/dsp1, and ran soundmodem with no errors. I hooked it up to the HT where there were APRS packets flying around, but no joy yet.

I figure the next thing to do will be to figure out how to set the audio levels. I have built alsamixer, but have not been able to use it to configure the USB audio yet. The alsa.conf on the N800 looks quite stripped down. I think I might need to figure out how to get it to support the typical hw:1,0, plughw:1,0 device names.

I will post updates as I make progress. If anyone has any suggestions please jump in at any time.