How do I remove players I don't use from the sound indicator?

Rather than blacklist the entry, it can be removed from the list.

Try the following:

kch:~$ gsettings get com.canonical.indicator.sound interested-media-players
['banshee', 'rhythmbox']

This shows I have two entries. To remove one, use the set option:

kch:~$ gsettings set com.canonical.indicator.sound interested-media-players "['rhythmbox']"

Note the quotes around the value to be inserted.

Now restart or logout, and the entry should be gone from your sound menu.

Currently, the only way to do this is to edit the seendb txt file that the menu uses to keep track of interested players.

Open terminal and type:

gedit ~/.cache/indicators/sound/familiar-players-db.keyfile 

This will launch the familiar text editor where you will see something like

DesktopFiles=/usr/share/applications/banshee-1.desktop;/usr/share/applications/rhythmbox.desktop;

Remove the rhythmbox and xnoise entries

and leave it looking something like

[Seen Database]
DesktopFiles=/usr/share/applications/banshee-1.desktop;

Save, then reload indicator-applet on the panel.