Akaz1976, actually the OS' digital audio feature is not even necessary for DVD. I personally use an old Toshiba DVD drive and although the option is available, if it is selected a warning message comes up (apparently it is on Microsoft's sh*tlist of drives known to have a problem with this feature) so I do not enable it, nor is an audio cable attached, but audio from DVD is still transferred over the bus and I do use SPDIF out to a receiver. So the digital audio feature is really only for music CD's.
So stick with crudas' advice (Mixer Digital Output Only / AudioHQ SPDIF Pass-Through & 48KHz, PowerDVD Audio SPDIF) and go from there. Disable all EAX Console Effects and CMSS 3D and see if any DSP effects can be disabled on the Cambridge system. Be sure to test with a 5.1 source and also that the Cambridge system can decode it -namely don't use a DTS source if it lacks that decoder but use a DD source). When playing a DVD or VOB file in PowerDVD select the option to Show Information to confirm a 5.1 source.
P.S. as for the digital audio feature if you want it for CD's, I have a fuzzy recollection (yes, another one) that only WDM audio drivers will allow it as opposed to previous VXD ones. But as always, Google is your friend