Volume controls all over the place

I leave all of them at 90% and just use the control on my speakers. If anything does get adjusted, it's the Windows one via my keyboard.

Thats a really messy setup you have there. If I were you, I would dual boot with Windows XP and use foobar with asio output, which will bypass all software volume controls as well as the kmixer, and then hook your receiver up to the line out on your sound card and just use the volume control on the receiver.

You DO have the receiver hooked up to an un-amped line level output on the sound card, correct?

I just use a native media player (you boot Windows in VMWare just for iTunes?! You're nuts :P Have you tried Rhythmbox or Amarok?)...

Rhythmbox is probably the closest to iTunes you'll find, I think - but I hate iTunes enough to not know it very well. You'll get your iPod support and all of that, and the interface is totally ripped straight from Apple :P

If you insist on the VM solution, I would recommend setting the client OS's volume settings all to maximum and control the volume from the host OS.

That is very bad and severely hampers sound quality, you are basically hooking up an amped analog output to another amp.

Well you said this is on a laptop, right? That would be pretty tough. The only thing that comes to mind would be the USB E-MU 0404, which is on the pricey side.

speaking about line outs and headphone outs, my audigy 2's line out/headphone out seems to be the same port?

Since it's a laptop, perhaps go with a USB DAC. I just bought one of these:
Digital Super Pro USB DAC 707 (what a name full) and it works pretty well. It's much smaller than it looks in the picture. It's the size of a pack of cards.

P.K.

A couple things. If you're willing to go USB, I believe it would be fairly easy to disable the driver from loading in Linux and VMware I believe has USB support provided the host OS doesn't grab the device, so you'd be able to access the sound device directly from the guest. I don't know how well this would work, but it may be possible - then no issue, provided you don't care about the host os's sound output.

A DAC is basically just a fancy name for a soundcard that does output only. Soundcards usually have inputs, mic ports, 3d processing etc. A DAC basically just converts the digital audio signal into an analog one, without doing anything else, so no extra processing steps or inputs or anything like that. Traditionally they take an SPDIF input and give a line output, but USB variants are becoming very common.

A problem you (may) have is that they don't generally contain an amplification stage, so they can't drive headphones directly. You'd need an amplifier as well.

An AlienDAC might be a good option for you, it's a DIY project but they're very cheap parts wise, so you should be able to find a used (or even custom built) one for a reasonable price.

Regarding USB bus contention - bulk transfers that hard disks use are the lowest priority on the USB bus, so sound devices will usually fare fairly well alongside them. It's not a guarantee though, and heavy traffic might cause some problems. Most modern computers have a separate USB controller either for every port or for every set of two ports, so that helps a lot, I doubt it would be a major issue. I use an AlienDAC regularly with the portable USB2 drive I use in my car audio system copying large amounts of data with not a hiccup.