I have been trying to get surround sound working from my PC on my home theater system. I have an onboard VIA soundcard, which has 3.5mm surround outputs and SPDIF optical outputs.
I have gotten 5.1 it working with movies in VLC, by selecting AC3 in the audio options. That works fine, and the receiver acknowledges that the source is 5.1 and outputs it as such.
Since games obviously don't support Dolby Digital (Only analog), they don't use more than 2 channels. I had to use Virtual Audio Cable routed to AC3filter with Graphstudio. This resulted in about 3-5 seconds of latency/lag. So, that does not work.
Now, I have two options. I can either buy $30 worth of cables and adapters to use analog audio, or I can use a Dolby Digital Live sound card to go through SPDIF. TL R