I couldn't get it to work in Windows 7, and debugging it I figuered the SoundSet didn't work. I looked up the command and they say that SoundSet doesn't work for Vista and above.
However they provide two solutions:
1) Run the script in Xp compatability mode
2) Replace the SoundSet muter with a "keystroke" mute.
I generally like to avoid compatability modes, so I went with the keystroke approach.
To mute, therefore, replace all "SoundSet, 1..." lines with:
Send {Volume_Mute}
I don't want my computer to unmute on restart so I don't care to know how to unmute it automatically.
For more info:
http://www.autohotkey.com/docs/commands/SoundSet.htm
Cheers