Did you try the driver from www.kxproject.com ? It should support Windows 7 x86-64 (no idea about 8.x)
The Live 5.1 was pretty great as long as you did not think about installing a Creative driver.

Won't that crap PSU brick that powers your external device pick up noise from the mains? (rhetorical question)
A desktop PC probably has the highest quality PSU in a random home inside it.
PCI is "dead" by the way. It's no longer that central parallel bus where most every component was connected to (on board sound and network, IDE, cards..), instead we have segregated PCIe lanes and if there are PCI slots on a motherboard, they talk to a PCIe/PCI bridge.

I trust the dB numbers given by Asus, Creative (even them) etc. because that's the PC hardware market, and with PC hardware you have no bullshitting and very low prices. I also trust decent reviews. Or just people reporting no noise whatsoever with headphones that cost hundreds, I think that's good enough.

If you're still using stereo, it's still simple and actually cheap to have speakers that are only speakers, and an amplifier that only amplifies.
The DAC can be placed anywhere in the chain.. Inside the PC, in a standalone box, in an amp, in a preamp. I choose inside the PC because the footprint is low, cost is low and it's always there.

Which would be your fault for not choosing the right motherboard, if you're buying one. From lowest end to highest end, and old sockets to the latest ones you can always find a board with one, two or three PCI slots.

Analog headphones, speakers and amps still are extremely widespread to say the least, mixers can be useful as well.

I use an internal sound card for stereo sound, it's still decently cheap. The concept that internal noise from the PC will ruin it is a myth, at least if you use a branded PSU that gives clean power (that is cheap too if your PC is not a gas guzzler and you don't needlessly oversize the PSU). There's enough further filtering on the sound card I think.1

I use a Xonar DX, which is way overkill (four stereo DACs and I use only one), I bet it beats your $40 DAC but that's not actually important.
I bought the card to feel good lol, it's nice to have a totally perfect sound output that can get plugged on any sound system, my card beats silly audiophile $4000 CD players and the like. I'm sure some Chinese DAC on USB or S/PDIF can serve me well but there's a bit of convience for me of not having a dongle or small box hang out of the tower. The small box I have instead is what I call an "audiophile" amplifier that costs $20 and was reviewed on Klispch horn speakers by guys on the internet.

Sure my second paragraph was more a general commentary about DAC quality, I could have written some different things in the posts. Using the receiver/amps DAC plus doing a long run, that's good enough reason to use digital, sucks that the live encoding is not always available.
One other little thing : some higher end onboards chips do support DTS Connect, and the vast majority of time it is disabled due to licensing reasons (a small cost must be paid by the motherboard vendor). It is enabled on some higher end motherboards.. and I'm pretty sure I read you can "unofficially" run the full featured driver!

By quick googling the DSX's manual says this, though I don't pretend to fully understand it (just plug a RCA into a jack?? but I guess you can use a trivial and cheap RCA to mono jack adapter)

"You can also use a coaxial cable for a S/PDIF connection. Just plug the coaxial RCA male connector to the S/PDIF-Out combo jack and connect the other end into the coaxial S/PDIF input on your decoder. ASUS Xonar DSX"

Indeed, this test shows the SB X-Fi is rigorously perfect for sound output to human ears. The "A/D Converter Frequency Response" section shows that you should choose a different card if you want to use it as a ghetto oscilloscope.

Creative Labs has that reputation, and they were dicks in general but funnily I had some real "audiophile" sound with Sound Blaster Live! and Audigy 1 cards.

Creative drivers were shit and I was even once stranded - I needed to download a CD image from unofficial source to get sound under Windows, whereas finding and using the DOS driver took me minutes (!). But a russian guy made a great driver that always worked and is perfect if you only care about getting an output (so no EAX gaming shit) and even the latency is low I think. It's still here http://www.kxproject.com/
One weird property of Live/Audigy cards is the output for rear speakers has better DAC and signal path, rated at 107dB signal/noise. The driver swaps front and rear speaker output by default. Sound quality was really fscking perfect as far as any regular usage is concerned. Now I have a Xonar DX which is much better (116dB SNR) but it feels like just the same and my sound is worse because I'm using it in a smaller, worse room.

So, to get cheap ass audiophile sound, old Live! and Audigy 1 are or were great. I would buy them for a pittance. Killed a great many of them though, they're easy to kill when you put them in another PC (be very careful and always fasten the screw even if you're thinking of running it temporarily unscrewed while setting up your PC hardware)

The transition from ISA to PCI killed it. Even Sound Blaster 128 (a.k.a Ensoniq cards) didn't support OPL2/OPL3 modes, which peeved me.
By the way the emulation from Dosbox is not ideal, be it quality or the high CPU use, but it does the job (the PC speaker emulation is worse lol)

Xonar DSX is an affordable card with that real time encoding you want/need (has DTS Interactive, not Dolby digital live but I suppose either will work). More than $30 and it has the DACs as well, but you won't find a sound card without DACs except maybe USB to S/PDIF adapters which won't have the feature.

Using analog cables isn't that dirty : it may look messy but that's all. Modern sound cards will easily be as good as your receiver, or even outmatch it. (while the DSX's DACs should be a fair bit worse, but likely good enough most times). In fairness, at that level the quality is so high that it doesn't matter anyone, everything sounds the same - if sounds volumes are adjusted to be the same - and a good DAC's job is to sound entirely neutral so you can't tell a good DAC from another one. Speakers and room accoustics (and the files, CD or game you're playing) is a ton more important.

Oh right, it's the Celeron J1900 (sold on standalone ITX boards) that was quad core.

What's more Virtualbox is made by the same vendor that makes Solaris and using it is a piece of cake..