10.6.4 Update removed 'Internal Speakers' now only 'Digital Output'

I have recently purchased the latest iteration of the MacBook Pros. Up until today, I had been running 10.6.3 and decided to jump forward and update to 10.6.4.
The update seems to have since killed audio output from the internal speakers. If I go to 'System Preferences' -> 'Sound' -> 'Output', I now have a view of "Digital Out" instead of "Internal Speakers". This does mean that the audio is no longer functional. The audio levels CANNOT be adjusted from within preferences, via the key combination, or the menu bar - all the controls are disabled.
If I plugin headphones, audio plays through the headphones as expected, but when I pull them out...nothing.
I'm wondering if it has something to do with the Mini DisplayPort? During the update, I did have a Mini DisplayPort to DVI converter plugged into the machine.
Any tips/suggestions/support would be much appreciated...

This worked for me:
http://josephhall.org/nqb2/index.php/2010/05/24/stuckonmute
1.Plug your headphones back in.
2.Play a bit of sound through them (e.g., a song), then stop the sound.
3.Make sure Preferences is quit.
4.Launch Preferences and open the Sound pane.
5.While the Sound pane is open and set to Headphones, pull out the headphone plug from the jack.
6.It will reset itself to "Internal Speakers" and you are good to go.
All credit goes to Joseph.

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