For some time, I've been running XP with a Diamond soundcard connected to a USB DAC with fiber optic, not USB, because the USB connection was slow/spotty. I also had a pair of A2 desktop speakers connected to the 3.5mm jack in the soundcard, therefore I could listen to either the desktop speakers or my Denon 2000s, simply by turning them on/off.
I recently upgraded to windows 7 and immediately tried the USB connected to the DAC, and it worked great! However, as you probably are aware if you are reading this, the USB DAC essentially shuts the soundcard off, so I no longer can listen to my desktop speakers with the USB DAC plugged in with USB, however, I am sure it would still work with the fiber optic connection.
I do not wish to unplug things when I switch between my headphones and speakers. I am hopeful that someone might explain what is going on, and if there is a solution to this issue other than simply going back to the fiber optic connection.
My soundcard is a Diamond Xtreme SX51:
My DAC is a Super Pro DAC 707: