Spdif stands for Sony Philips Digital Interface. That connector carries a digitally encoded dolby digital stream and the only thing that can decode that stream is a dolby digital recevier which will then convert it to analog so your speaker can interpret it.
There is a SB Live! version that has analog center channel output. I believe it is the 5.1 series which has a separate 1/8 jack that you can hookup a center speaker. I think the newer Audigy has the same thing.
If you have the newer 5.1 you may tray to hookup the speakers to that additional jack but if you have the older version like me your out of luck, you'll need a dolby digital receiver to get dolby digital out of your sound card or you may get speakers with Spdif inputs and Dolby Digital decoder built in like the Creative DT2500.