In OS9 I used to be able to drop system sounds onto the system file and then assign sounds to various things in Entourage. (like when getting an email I'd have it say the name of the person writing)

In OSX though, there doesn't seem to be any way to do this.

Where do you store system sounds, and how do you access them from Entourage?

I don't have Entourage, but there are two locations for Sounds
open the HD icon, on the left, click your login ID.

Library->Audio->Sounds

and

Library->Sounds
your system preferences for Sound Effects are here

Yeah, I tried that but Entourage still doesn't recognize the sounds.
It only lists the sound sets provided by Microsoft.

Unless I'm missing something.

It is kinda strange. I used to use another program called SndControl to give sounds like 'unreadable disk' or 'welcome' etc... and can't find anything to do that either.

SndControl was OS 9 and beyond. Try surfing of OS X SndControl?