Resampling is not bad per se (the reasons for it being used include playback of multiple sounds with different sample rates at once and outputting stuff with non-matching sample rates via old-style AC97 codecs which support 48 kHz only, like those on your card), just not trivial to get right with low distortion (mainly high-frequency IMD, some harmonic too). (Audacity still needs a good bit of work here btw, I was rather disgusted with the RMAA results of a file resampled from 44 to 48 kHz with it. The tricky part: Stuff resampled that way actually sounded better than the original due to the 3rd order harmonics present.) Hardware resampling inside sound card DSPs typically involves a tradeoff between quality and performance (you still want to do other things like 3D sound positioning after all). Creative puts more emphasis on performance (for gaming obviously), while the CS4630 on the "Santa" showed better balance here (see the Digit-Life review). There seem to be multiple ways of doing resampling (synchronous and asynchronous sample rate conversion appear to be main categories), a DSP guy (or resampler programmer) can certainly tell you more. Somewhat nontrivial stuff I guess.
Anyway, taking the good ol' blackbox approach, we only need to know that resampling may cause distortion as mentioned and that the kind applied by sound cards (and their drivers) tends to be of moderate quality only, inviting the use of good-quality software resamplers, e.g. SSRC.