So here are a couple of suggestions:
IPC = "Playing audio from another program"
WDM = "MC driver for playing audio from other programs"
I don't think either of these are clear. They have the problem of being simplified to the point that they are no longer helpful.
"System Audio via JRiver Virtual Audio Device" tells you exactly what is happening.
If the user sees this message, their instinct would be "Well how do I stop the JRiver Audio Device?"
If you're looking to prevent this from happening, you would then look for the "JRiver Virtual Audio Device" - which is why I think that should be the default name for the device.
That way one message leads you to the other.
With your proposed names, people are going to say "Some other program is sending audio to JRiver, how do I stop it?"
In another application selecting the device "MC driver for playing audio from other programs" is a bit silly.
It's important to have names which are instructive, not just descriptive - especially if that description requires the user to have some pre-existing knowledge of the program. I think this is a problem throughout Media Center as a whole.