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I would guess that you have "FPS Override" turned on, which will automatically disable sound in any mode.  Make sure that is off if you want sound, even when recording Canon h264.

Does that fix it for you?

Well, I have worked with FPS Override turned off and still the Sound Disabled would come on after I record something.  Something I noticed, after I reverted back to 2.0.2 firmware, I had to bring my Sound Recording back to audio, so maybe it was something in my part.

I may try to go back to ML and figure out what's going on.

I have a question:

Every time I use the ML to do do regular video recording, when I hit the red movie record button.  The screen tells me that Audio is disabled.  Is there a way to un-disable it - I'm not shooting Raw?  I'm just trying out different types like using the Anamorphic option since I have anamorphic projection lens and wanted to do some widescreen stuff.  Also when I try the Anamorphic, and then hit record with the audio disabled (I don't understand), my filming gets out of whack, e.g.: it shoots a frame a sec.

Is there a way to remedy this?

P.S.: when doing regular movie recording, it would say "Sound disabled"

@CinB13:
can you show me an example of the remaining dots?

I, unfortunately have been testing around the RAW on EOS-M and may have deleted it.  But I tried the RAWanizer to remove the pink dots on the middle of the clips, let it run, go to my editing program [Vegas], and I do see blue dots on the right side of the clips.

So, I won't rule out the implementation of RAW in EOS-M as it got a lot of ways to go in my opinion, but I won't abandon my trying out H.264 either.

P.S.: While following Mark's version of using 720p RAW, I don't see the dots.

@maxotic so, in your opinion what's better - the RAW or the H.264?  I realize that RAW is the real deal then the Video side.  I tried like you and many others, it's a great experience, but I don't see any difference in the RAW.  You're right, even if I tried the PDR and the Rawanizer, I still get other dots on sides of the clips.  So, DCRaw is the better choice in doing RAW/Tiffs -- I'm quite new to all things RAW...  Just like to hear other people's opinions.

My steps with EOS-M so far
1. Follow steps in other posts to get it ML to work with Firmware 2.02 (if that's what you have)
2. Boot camera, load ML, load modules (set to autoload), set to RAW, resolution, etc., in ML.
3. Press MENU, take some RAW video.  I wouldn't shoot a lot your first try. 
4. Copy RAW file over to computer
5. Load PinkDotRemover (THANK YOU AUTHOR OF THAT).  You'll need Java installed.
6. Make a copy of your RAW file if important (PinkDotRemover) modifies original.
7. Drag copy or original to PinkDotRemove, pick camera, and run.  NOTE: You won't see a status message, but it should finish in a minute or two. It will say so.
8. Open RAWanizer, select RAW file
9.  Pick Cineform and have it create video output

That's my easy workflow at moment.   I use that for 50D too (except for PinkDotRemover, which isn't necessary for that camera).

Thanks a lot.  I shall try that out next time.

What was your workflow? What resolution? what frame rate? crop mode?

You can remove the red dots quickly and easily with a little software program:

http://dl.dropbox.com/s/m0bxzd23p4zow8o/PinkDotRemover_2013_08_08.zip

It works directly on the RAW files and you can do all of them at once (in batch).

See my video from RAW: https://vimeo.com/72310879

No dots.

How do you use the PinkDotRemover, do you apply it with the camera, or is this for computer use?

Here's something I did using the ML Timelapse method.  The ungraded master I had (png to losless codec) was close to 1GB, were graded afterwards.

Anyways, I like the timelapse as a tester I did.

http://youtu.be/Tv1tgitfenM

I played around with the ML successfully on my EOS-M... but I can't, for the life of me, get video in high-bit-rate or Raw video right on my part.

In order to do RAW, do I shot in Camera or Movie Mode, and do I shoot in the Menu button or LiveView (if so, where is the LiveView mode)?

Also, how do I obtain a slightly higher bit rate other than 45+.

Still a newbie at all of this, but quite fascinated so far.

Not for technical reasons. They got it working smoothly across several bodies. It's out on some older nightly build.

Devs working on 2.0.2. We're just waiting for a building to get wired. *sits patiently*

That's good to know.  I just got my Minolta MD/EOS M adapter today and did some video shots pre ML.  Really impressive so far.  Can't wait to see what comes up next.

That makes sense and I'm glad to hear you can get clean hdmi out with this camera. I don't need to record too long, only 60 minutes. Maybe they left in the 30 min limit due to overheating concerns? In any case, getting rid of the limit would be super nice for me, so if anyone has more info and there is a possibility of the limit being removed again, that would be great.

Josh

So it's possible to use the HDMI out and put a monitor like a Liliput or SmallHD in it?  Just asking. 

I'm new here.  This is quite interesting.  It's my first Canon EOS mirrorless (except my Panasonic GF2), and I just purchased a brand new  body today for $240 - hoping to use my legacy lens w/ adapter.  I like to know what are the benefits of ML in terms of image quality and better low light capabilities.  Shocked to find out that it has the sensor of T4i/7D.

I will check back here for developments.