It could be the volume switches or the circuit inside of the MacBook keyboard. Have you tried plugging in an external keyboard that has volume controls on it, either USB or Firewire? If the volume controls on the external keyboard work, then your MacBook keyboard has failed and needs to be replaced.
This is what I'd suggest to fix this same problem on a Windows laptop as well.
I haven't yet tried a external keyboard but I do have one and I'll try it when I get home later today.
I just wanted to know how to disable the default noise or sound it makes when I increase and/or decrease the volume from the buttons... kinda similar to the ding noise Windows makes when you move the volume sliders up or down but it makes a different but similar noise when I use the keyboard volume buttons as opposed to the volume slider on Windows. I know I can disable the ding noise inside Windows sound settings itself but I didn't know if I could disable the pop sound.