A debian user have opened a bug which I can't reproduce on powerpc, but which seems to be reproductible on x86. The volume keybindings dont work (the default ones like new ones), it seems that there is a problem in xfmedia_xine_set_param. You can see this bug here: http://bugs.debian.org/cgi-bin/bugreport.cgi?bug=331584 Reproducible: Always Steps to Reproduce: 1. 2. 3.
As far as I know, I've seen something similar in xine-ui. I think, depending on the audio output plugin being used, the volume can't always be set properly. For example, I've seen this before when using ALSA on my system, but selecting the OSS plugin in xine (alsa-oss emulation is enabled, but the mixer emulation apparently isn't working properly). Anyway, you can ask the original poster to try changing audio output plugins (if they're using xfmedia 0.9.x, they can do this via Preferences->Devices) and see if that helps. Otherwise I'd suggest bugging the xine devs about it. Also have him try with other xine frontends, such as xine-ui. If the bug appears there as well, it's definitely not my problem.