Just to post an answer for this for anyone else reading, I believe Win 7 can run multiple sound outputs at once. So if you have your headphones on and then throw in your optical output you could end up with audio being sent to both headphones and speakers. If you right click and get the properties up, you can fiddle around with the controls and tell it what you want as your default audio output. If you have multiple of those little speaker symbols on the taskbar you could mute all the ones you don't want if you're lazy, but the proper way to only use what you want would be to head back over to properties, pull up the list of all audio devices, right click and disable what you don't want.
You said you figured it out. I assume your solution was something similar?