I always thought that was a cool idea. Have some "application mute" button in the corner of the app to mute sound individually as a core OS piece. It's got to be totally possible. There are apps that let you control audio (as the one linked), but wouldn't it be cooler just to have a standard UI button on the window itself?
Edit: just saw that you can have detour show up in the menu bar, very interesting. Going to check that out tonight
Edit2: drat it seems to have issues in 10.4.3 and is no longer supported