Skype blocks the audio of other applications during call with headphones

To play all sound on one device do the following:

Open Skype preferences under Tools -> Options -> Audio settings
Select "Speakers/Headphones" as Speakers.
Select "Use selected speaker" as Ringing.
Uncheck "Automatically adjust speaker settings" for Speakers.

More details are here:

http://community.skype.com/t5/Windows/Does-your-music-alert-sounds-play-through-speakers-when-you-do-a/td-p/484041

Problem solved, tried best answer above to uncheck in Skype, still a problem lowered VLC Media Player volume merely for Skyping. Found success then for Windows 10 anyway, go to Control Panel, click big green 'Hardware & Sound', under Sound click 'Manage audio devices', click 'Communications', check 'Do nothing' for the "When Windows detects communications activity:" to thus uncheck any volume reduction.