The Cafu engine fails to initialize when no sound system could be initialized and the "Null" fall-back sound system cannot be loaded as well. This happens with the current release (Cafu-bin-r174-win32.zip) packages, because Cafu looks for the Null sound system in the wrong place:
C:\Cafu-bin-r174> Cafu -log:console.log
C:\Cafu-bin-r174> type console.log Cafu Engine, Nov 5 2010 config.lua processed. Warning: Failed to open ZIP archive Games/DeathMatch/Textures/TechDemo.zip Registering archive "Games/DeathMatch/Textures/SkyDomes.zip".
Scanning cwd for all available renderers... ./RendererARBprogs.dll ... SUCCESS - first supported renderer (Pref# 2200). ./RendererCgARB1.dll ... SUCCESS - but no higher preference (Pref# 2100). ./RendererCgNV2X.dll ... FAILED - renderer says it's not supported. ./RendererNull.dll ... SUCCESS - but excluded from auto-selection (Pref# 1). ./RendererOpenGL12.dll ... SUCCESS - but no higher preference (Pref# 1000). Reloading previously auto-selected renderer ./RendererARBprogs.dll ...
Scanning cwd for all available sound systems... ./SoundSysFMOD3.dll ... SUCCESS - first supported sound system (Pref# 1000). ./SoundSysNull.dll ... SUCCESS - but excluded from auto-selection (Pref# 1). ./SoundSysOpenAL.dll ... FAILED - SoundSys says it's not supported. Reloading previously auto-selected sound system ./SoundSysFMOD3.dll ... WARNING: Sound system failed to initialize! I'm sorry, but this is probably due to sound driver problems with your computer.
We'll proceed anyway, with sound effects disabled. FAILED - could not load the library at Libs/build/win32/vc8/x86/release/SoundSystem/SoundSysNull.dll.