No associations would be necessary. When you say your sequences and music are in the same directory that is also the same directory configured in xLights correct? When you are in playlist creation mode do you see the mp3 files if you click the audio check box?
Are you trying to play Vixen, LOR, or xlights sequence files? You may want to do a quick zip file with a sequence you want to play and post that. Also, post the exact text of the error message you are seeing as well.
This might help us figure out what is going on.
Frank