I've been told it doesn't work in gpSP either. No clue, really. It works even in my GiiBiiAdvance, and it's not the most accurate emulator out there...
Yeah, the trick there is to demolish everything around the fire. I was going to implement something like in the original Sim City, where you can put firemen on the map, but I didn't have time for this kind of things.
You can use any tools you want. For music I use OpenMTP, and usually people use maxmod to play them on GBA. For sound effects, no idea, but maxmod can also play them.
