Microsoft Corporate Vice President Amir Majidimehr recently took time to post in AVSForum on the new digital audio features in Windows Vista that haven't really seen much publicity yet.  Net-net is that when paired with the right audio drivers supporting the new features, you'll get customizable enhancements normally reserved for high-end AV receivers such as:

• System-wide Loudness equalization
• Bass Management (get the bass channel even on systems without a subwoofer)
• Better support for surround sound systems up to 7.1 channels
• Virtualized surround sound (Surround-->2 speakers)- mix 5.1 DVD's to headphones or standard desktop speakers
• Virtual Surround (Stereo-->Surround)- turn 2-channel into surround sound for your receiver
• Room Calibration - using a simple microphone, this profiler "listens" to the sound from each of your speakers to automatically adjust pitch and volume for where you're sitting in the room.  The better the mic, the better the results (My favorite for Media Center in the home theater!)

Now, not all audio drivers will support these features at Vista RC1- it's up to the sound card manufacturers to support it via in-box class drivers.  I know that HD Audio from Intel integrated into many new PC motherboards over the past 2 years does support it, but the currently available Beta 2 drivers from other card manufacturers haven't implemented yet.

Also worth mentioning is the work being done to really reduce latency and improve resiliency in the entire audio stack, both important to pro musicians and consumers alike.

You can also ask Amir questions about Vista Audio Processing here.

And a new whitepaper with more detail on Audio Innovations with screenshots is available here via the official Vista Blog.