When you have digital speakers connected to your Power Mac G5, your internal speaker will not mute–even if you select the mute checkbox in Sound preferences. But you can set the internal speaker’s volume low (in Sound preferences) as a workaround.
“Digital speakers” means speakers that connect to the optical Digital Out audio port with Toslink cables, and use the S/PDIF (Sony/Philips Digital Interface) protocol.
To mute the internal speaker, disconnect the digital speakers. Or, if you like, use a different kind of speakers to avoid this issue.