I just bought Airfoil and set it up this weekend; it's working great for me and no trouble setting up. Maybe a few suggestions/system checks to go thru...
In certain applications, Airfoil seems to broadcast at a much lower level. Playing something on iTunes and then the same thing on Airfoil, you may notice a difference. If you have your stereo's volume set at 3 (out of 10) for iTunes, you may need to go to about 6 or 7 to hear the same thing on Airfoil (depending on the respective application you a broadcasting through). Bottom line, you may just have the volume too low (probably not this simple but it's possible). I switched from an Airfoil source to Airtunes once and nearly blew out my speakers.
There is this note on Airfoil regarding a potential error. I doubt this applies, but worth a check. http://www.surfbits.com/?p=1435
When you say you can play on iTunes, do you mean you are able to successfully use "Airtunes" to transmit a signal to your remote speakers? If that's working ok, then I'm also pretty stumped.
