Sounds help identify spells, along with animation and any AddOns you might have. Having sounds focused on environmental effects, spells, and characters also provide a more immersive gaming experience. If you use communication tools such as Ventrilo, TeamSpeak, or even the game's built-in audio, a good headset can go a long way towards improving your PvP.
You can set your Voice-over-IP program not to use a Push-to-Talk hotkey so your hands can be dedicated to spells, movement, and typing commands or chat. Make sure to set the sensitivity low enough so that it doesn't pick up ambient sounds, otherwise it'll be an unpleasant experience for your teammates. This is where unidirectional and omnidirectional microphones can make a difference.
Omnidirectional microphones, usually those small clip attachments that come with smaller headsets or earphones, can pick up sounds from everywhere. Unidirectional microphones, usually those that swing directly from the headset, are sensitive to sounds from one direction. If you play in crowded places or a noisy environment, unidirectional microphones are a great thing to have. What you use will depend on your typical gaming environment.
Alternately, you can opt to assign an easily accessible hotkey on your gaming pad or mouse for your communications. Personally, I prefer hands-free operation so I don't have to think about buttons whenever I communicate during an Arena match.
It's interesting to note that Patch 2.2 introduced an in-game, software-based sound engine that allowed World of Warcraft to be more aurally robust across more types of systems and set-ups. It's improved quite a bit since then, but the general idea is that the game sounds will work pretty much no matter what sound equipment you use. If you use a 5.1 or 7.1 surround sound headset, it'll work. If you have a rinky-dink pair of earphones, those will do fine, as well.
The most ideal set-up would be a headset that supports surround sound. That way, you'll be able to hear sounds directionally in-game. If a spell is cast from behind you, you'll hear it behind you. If someone stealths from the left, you'll hear it from the left. This works fine with plain stereo speakers, but obviously works best when your audio set-up allows you to visualize where the sound is coming from.
As with everything we've discussed so far, a sound system is entirely optional. If you wish, you can choose to play World of Warcraft without sound, as I'm certain some hearing-impaired players actually do. For the most part, however, access to proper game sounds - particularly positional audio - helps you PvP a great deal. There are a great number of options available, as many manufacturers offer sound cards and headsets, from the low end to the exorbitantly priced. Get a headset that you'll be comfortable wearing for extended periods of time.
I use a Logitech ClearChat Comfort USB, which works fine, but the synthetic leather ear pads become hot and uncomfortable after extended play (and I tend to play long hours when I PvP, and my ears become sweaty). The sound could be better, and the microphone picks up more sounds than I'd like. But I got what I paid for as it set me back $39.99 versus dedicated gaming headsets such as the Logitech G35, which in comparison costs $129.99. I'd upgrade my headset to a Razer Megalodon if I could afford it, but I can do without. The bottom line is that it's a luxury.
A great sound system will not make you a better PvP player. Neither will a great mouse or a fast PC. The only thing that can make you a better PvPer is constant practice. Battle all the time. Play all the time. The more you play, the more intuitive your responses will be. But there's a reason pro gamers prefer particular equipment (aside from sponsorships, that is). Hard core gamers demand precision and performance from their systems, which gives the argument to specialized gaming gear. Will it spell the difference between winning and losing? All things being equal, it's actually possible.
Gaming grade equipment makes more of an impact in LAN play, and only very marginally in MMORPGs, where latency can actually eliminate any edge you gain from gear. But as with all endeavors, you should feel good about how you play. This is your game, so play it the way you want to. If you're comfortable and happy with your gear, then you're all set. If you win while you're at it, then consider it a bonus. Go fight!
Previously on gearing up for PvP: