Coreinsanity

Well, I already have that enabled (I use it over skype sometimes, I generally keep that enabled).

However, I am not quite sure where you want me to go with it, though? The Stereo Mix is for playing what I would be hearing (Eg: Music playing on VLC), through an input device (Such as my Microphone) as such that it could be played over skype (for example).

My problem is that I have no speakers (Aside from a headset, which can't plug into the xbox 360) so I can't hook any speakers up to the xbox (Even if I did, I am not sure how it would work with just regular computer speakers), and my monitor does not play sound, so the HDMI sound won't work. Now, on Windows 7 RC1, all I had to do was go to "Speakers" properties (My headset), and set the volume level on the Digital Input playback, so that it played what is coming through the digital input in my headset. This produced lagless sound from the Xbox and allowing me to set it all up without having to spend money on more stuff. So the problem that comes in is the fact that Windows Vista (Ultimate SP2, tried it on no SP and SP1 as well) does not have an option to set the volume on the digital input playback in the Speakers properties, it's just gone. So the only thing I can do to play the sound from the Digital Input is to have VLC play the Digital Input audio device, however this has a lag as I believe it is not streaming it, but rather caching it every (x) ms, and so it lags (I decreased the cache time and it did make it more realtime, but it also added some weird static noise that would occure every time it cached).

So basically, Vista doesn't have an option to allow me to play the Digital Input through the headset (Which is not digital), and VLC lags due to it caching and not streaming in realtime. And Windows 7 has the option to do it, so I know it can be done, it just seems to be limited by Vista or drivers interacting with Vista.