There is a FAQ answer on this, but I thought I'd expand on it as a blog topic.
Firstly, refer back to a previous blog post on accessing the sound actions in Time Out. That shows where the "Play Sound" feature has moved in version 2. It is now much more powerful than in version 1, with the ability to play sounds before, during or after a break, and even gently fade out long sounds like music. That post also includes a video demoing adding Play Sound and Fadeout Sound actions.
Time Out comes with a number of built-in sounds that you can play, plus it lists all sounds you have installed on your Mac, which includes system default ones, and any you have added to the standard sound folders.
It's worth noting that you can also have Time Out play any music from your iTunes library, too.
To add more sounds, you first need to find and download them from a website.
There are many sites that offer sounds of varying length, quality, themes, etc. Some for free, some as paid offerings. Usually with previews so you can listen before downloading.
Here are a few I've found; note that I don't endorse or recommend any particular site; these are just ones I encountered in a brief search. If you're aware of or find a better site, please post in the Time Out forum to share with others.
Once you have the new sounds, you can easily add them in one of the standard folders to make them available to all apps that can play sounds, or add them to the "Sounds" folder within the Time Out data folder to only make them available in Time Out.
The system sound folders you can add to are in the following paths (tip: you can paste these paths into the Finder's Go ▶ Go to Folder... command to reveal them; if the folders don't exist, you can create them):
(There is a third folder, at /System/Library/Sounds, but you shouldn't modify that.)
On the other hand, Time Out's sounds folder is at one of the following paths, depending on which edition of the app you have:
While you can use the Finder's Go to Folder... command to access those, an easier way is to choose Reveal Scripts from the Add Action drop-down menu. That will show the Scripts folder, which is adjacent to the Sounds folder. (I do want to make this even easier in the next update.)
I hope this has been helpful!