Audio problem solved

I have solved the problem I had earlier. I did a complete new installation of Windows XP on the second PC. I had to do this as some of the drivers were corrupt in that installation and it could no longer access the Internet.

So I did a new installation with the original drivers, including the sound drivers, and these drivers have more settings in relation to digital output (or else the settings were hidden in the later drivers) and now I can get perfect digital 5.1 sound going from PC2 to PC1, but only from the SPDIF coaxial via coaxial to optical converter and into the optical input on the Audigy card on the first PC. It still won't work using a direct coaxial connection.

But at least it works and I now have sound from either PC, DVD player or TV, playing through my 5.1 speakers.