I recently had the same problem after installing an ATI 5770 on my HP Pavillion Media Center.
I found a thread on the AMD game forums that fixed it for me; basically,
go into your BIOS setup. Search for "Onboard Audio" which is likely set on "AUTO".
Change this to "ENABLE"
My Control Panel now allows me to select the "Realtek HD Audio rear output", and everything works again.