Well, I have been playing around PulseAudio to see how it works. I realized its impossible to play 2 audio streams at the same point. Under System>Prefs>Sound I selected ALSA for all the devices and I managed to play 2 audio streams.
Then I browsed through PulseAudio website for a guide and I came across a Perfect Setup guide. The guide mentioned to install all the GUIs required to configure PulseAudio. I installed them and checked all the options, there was a lot of stuff and I didn't want to mess my system up further.
After all this, I am wondering why the devs have included PulseAudio in a LTS release. Is there any advantage PulseAudio can give that ALSA cannot. On 7.10, ALSA didn't give any problems, so why is PulseAudio installed by default.