Does your TV have a headphone jack? Because I believe that the sound will be Airplayed rather than be local on the iPad. Basically you have to source the audio from the destination, ie. the ATV or TV.
No headphone jack on tv. I've thought about the simple stuff. I'm wondering if there are setting changes on the pad that can allow the units headphone jack to work during AirPlay.
I use the VGA adaptor, so it only send the picture to the TV and allows you the plug in a headset or speakers into the jack. Just means you have to bypass the ATV.