Due to some changes in Windows Vista and Windows 7, midi music can no longer be turned down independently of sound volume. Unfortunately for the time being, the only way to be able to turn music down while keeping your sounds is to turn music off entirely.
To do this, go into the Odamex Launcher, goto file > settings and find the box at the bottom that says "Extra Command Line Arguments". In that box, put in "-nomusic" without quotations.
WADs and directories
Odamex looks for wads in the following order:
Commandline -waddir parameter
DOOMWADDIR environment variable
Working directory
Program directory
Make sure at least one of those has the wads you want to use. You can also specify semicolon (";") delimetered lists of paths in either the commandline or in DOOMWADDIR.