Ahhh... That explains it. You're using the Microsoft DVD decoder stuff. I don't believe they let other applications use their software audio decoder (if you look at that list you can see there's no MPEG-2 Audio Decoder or AC3 decoder listed).
The easiest way for you to solve this would probably be to download and install the Combined Community Codec Pack. This includes DirectShow filters which can properly handle AC3 and MPEG-2 audio tracks.
You can download it here:
http://www.cccp-project.net/That's really what I'd recommend, for simplicity's sake. It's easy to get and update when new versions come out, and it generally "just works". However, two alternative methods, if you don't want to install that whole codec pack are:
1) Download and install the current build of FFDSHOW by itself. You can download it here:
http://celticdruid.no-ip.com/xvid/Click on the FFDSHOW link on the left and then download the version appropriate to your computer:
ffdshow-rev2529-SSE.exe - good for pretty much any Pentium 2/3/4/D/, Intel Core, or AMD Athlon processor.
ffdshow-rev2546-SSE2.exe - good for any Pentium4/D, Intel Core, or AMD Athlon 64/Opteron64 processor (
don't use with older Athlon XP or Pentium 2/3 processors unless your sure they support SSE2)
ffdshow64-rev2546.exe - this would be for use with Windows XP 64-bit or Windows Server 2003 64-bit editions with a 64-bit capable processor
When you are installing FFDSHOW, you'll want to enable MPEG-2 and AC3 in the Audio section of the install.
2) Download and install AC3Filter. You can get this from here:
http://ac3filter.net/.
If you want to output sound from your SPDIF port to a Dolby Digital receiver, I'd use FFDSHOW (or the older AC3Filter 0.7 version) because this feature is broken in the newer 1.0+ versions of AC3Filter.