I agree, definitely Andean panpipes.  You can find literally hundreds, if not thousands of bands playing South American and Andean music in the "World" Music Section of any major record/CD shop.  Most of them have a pipe player, if you like the sound of that instrument.  Paul Simon used those pipes on several of his world recordings, and some with Simon and Gafunkel  (I forget the title of the song, but they lyrics are something.."I'd rather be a hammer than a nail..." etc..I think it's from el Condor Pasa). 

If you ever travel in Mexico, Central America, South America..etc...the Andean sound is extremely common.  Everybody and their cousin seems to be in one of those type of bands, and you can hear Andean pipes to your heart's content; little groups often play in public, on street corners, in restaurants, etc..

 The instrument is so popular, that it is incorporated into synthesizers and digital keyboards as a sampled sound, so if you play keyboards, you can get the "pipe/pan flute" sound at your fingertips.   I think many music stores now sell them, so you can try your luck at playing them as well.

 Personally, it is actually one sound I can do without.  I am not real fond of it.   But...happy hunting. 

Gene