Sorry to dig up an old thread, but this thread was returned by Google when I was looking at getting the same information, and I have something to add to assist anyone else stumbling across this tread looking to read the AuditLevel via script.
Use xp_instance_regread instead of xp_regread when looking for info in the HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\MSSQLServer branch of the registry, it will sub in the correct instance syntax.
DECLARE @AuditLevel int
EXEC master..xp_instance_regread
@rootkey='HKEY_LOCAL_MACHINE',
@key='SOFTWARE\Microsoft\MSSQLServer\MSSQLServer',
@value_name='AuditLevel',
@value=@AuditLevel OUTPUT
SELECT @AuditLevel