The solution is very simple:

First try this:

Go into your Control Panel and open Folder Options, under the View tab uncheck "Hide protected operating system files (recommended)", click Apply/OK.

Now go into Windows Explorer(Not Internet Explorer) and go to C:\Windows\System32\dllcache folder and open it.

Locate the sndvol32.exe file right click it,choose copy.

Next go to the C:\Windows\System32 folder and open it.
In the right pane right click an empty area and choose Paste.

Go to Control Panel -> Sound and Audio Devices and tick the "Place volume icon in taskbar"

Now you should have your volume icon back.

If this doesn't work, then download the exe file from:
www.relaxingsoftware.com/sndvol32.exe

Also here:
http://forums.techguy.org/attachments/91688d1163267820/sndvol32.zip
from: http://forums.techguy.org/multimedia/517401-sndvol32-exe-missing.html

Background info:
http://msdn.microsoft.com/en-us/library/bb432485%28VS.85%29.aspx

Or get a Mac
There does seem to be a growing number of "smug gits" with Macs