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Mostly off
Background music: always off for ALL games (except Osmos). It's typically the first thing I do when I start up a new game -- find the options, and turn off the stupid music. I'm a musician, and the background music for games is trite and repetitious (again, with the exception of Osmos -- very cool ambient stuff there).
Sound effects: usually on, but with the sound turned WAY down. I keep the sound on only for the feedback...for example, knowing that I have actually grabbed the sickle before I sweep it back and forth all over the screen. Exception: when my wife is nearby, I turn the sound off (by clicking the sound switch on my phone). She thinks phone games are stupid, and I don't want to advertise when I'm being stupid.