As posted in this thread here is a link to some video of our 2007 Worm Drive Prototype driving around on its first run. It has some good close up shots of the modules near the end and some entertaining commentary.
we are using 3 sets of cable, 1 for each side (front and back) and one that connects them.
In our prototype, all of the cables go around the same grooves and the same sets of pulleys. The friction of the cables is what is causing that noise. On the final thing, we seperated the cables into seperate pulleys and seperate grooves. It is almost silent now.