This may sound stupid, but what are you using the PC for? Is it DVD playback or mainly music? This question does affect the answer.
(for music) Going on-board optical like you're doing, is going to be about the best quality sound you're capable of, in stereophile terms. BUT, the limitation is in the number of channels supported by SPDIF, and the bitrates.
(for DVD) If you're needing the surround mode, then you're looking at upgrading the PC to a soundcard with the DTS capabilities.
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