Which sound? Keyboard clicks or like music?
Things like keyboard clicks, the sound it makes when you lock it, when you plug it in, and such wil come from the iPad speaker.
But music, and sound for videos and such should come from the tv.
Edit;
Wow... I don't know how I didn't pick up on this before.
Display out only mirrors video, no sound.
To get mirroring and sound:
1. Uninstall display out
2. Download iFile
3. Open iFile and navagte to system/library/coreservices/ SpringBoard.app
4. Scroll down until you see K48AP.plist
5. Tap on it and select "Property List Viewer"
6. Tap on "capabilities"
7. Down in the bottom right of iFile, tap the "+" button
8. For the name, type "display-mirroring" (without quotes)
9. Under that tap on type. Select "Boolean"
10. Tap "create" in the top right of that window.
11. Now, look in the list for "display-mirroring" and slide the switch to on.
12. Reboot. If you are running a tethered jailbreak, reboot with redsnow, or snow breeze. Whichever you used to jailbreak.