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It seems generating sync-ed sound and video on AVR its not that easy. AVR Atmega88 microcontroller is clocked at 20MHz and so it generates 45 full VGA display lines at almost 60Hz frame rate. Sound is generated during VGA horizontal blanking periods. That gives a sampling rate of 31496kHz which is enough for good chip-sound quality. Sound player is capable to play four sound channels. And all that beauty is programmed in pure assembly language for best performance.

Generate Sound and Video on the same AVR chip: [Link][Via]