OMX also seems to be the culprit when the audio drops out during lag. OMX is also insanely loud, much louder than all the other emulators on the pi and I am forced to turn down the volume every time I play N64. OMX seems to be the default plugin that is currently used, however OMX is apparently not compatible with save states and Mupen64 crashes every time I try to load state. So after doing some research I found that there are two main audio plugin options that mupen64 on the Pi uses. I found this to be very annoying especially if there was a voice-over playing, I could end up missing something important. Something I noticed with standalone mupen64 on the pi is that when the frame rate drops, the audio will completely drop out as well and there are sometimes long stretches where there is no sound until the FPS goes back up.
For myself, I can handle some slowdown in games as long as the audio keeps playing. So I am sure that everyone is aware that N64 emulation on the Pi is not perfect.
