EDIT: Sorry, only just noticed this is for OnDemand, my answer was for download version and I'm not sure if Atlassian allow you to enable the HTML macro.
Yes, you can embed Soundcloud widgets in Confluence if you enable the HTML macro (bundled, but disabled by default).
Login as a confluence administrator and select Browse -> Confluence Admin -> Plugins -> Manage Existing -> System Plugins -> Confluence HTML Macros. Expand "Manage Plugin Modules" and enable the HTML module.
You can then use the following markup to embed your Soundcloud widget:
YOUR WIDGET CODE HERE
Tested with the HTML 5 Soundlcoud widget on Confluence 4.1.4
Hope that helps?
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