I had a look at my Audigy 2 card last night and saw the connector you described. When I saw that it was labeled "CD S/PDIF" I feared it only accepted TTL levels (as that is what many computer CD ROMs have) rather than the standard .5 volts P-P levels normally associated with S/PDIF. Glad to hear it worked.

Where is the option to use the digital input in the sound card drivers? Does it suddenly become available when connecting a digital source?

Stu