As of July 2012, the WebAudio API is now supported in Chrome, and at least partly supported in Firefox, and is slated to be added to IOS as of version 6.
Although it is robust enough to be used programatically for basic tasks, the Audio element was never meant to provide full audio support for games, etc. It was designed to allow a single piece of media to be embedded in a page, similar to an img tag. There are a lot of issues with trying to use the Audio tag for games:
I used this Getting Started With WebAudio article to get started with the WebAudio API. The FieldRunners WebAudio Case Study is also a good read.