SoundBlaster Z SPDIF out, DTS connect or Dolby Digital Live don't work!

I just got a new Creative SoundBlaster Z PCIe card and I hooked it up to my Pioneer VSX-523 receiver via optical SPDIF (toslink). Now no matter what I try I can't get DTS or Dolby Digital to play. I either get PCM or I get no sound at all.

If I set the Creative "Pro Studio" software to "no Encoder" then the receiver's LED panel shows PCM and I hear stereo sound. If I set the same software to "Dolby Digital Live" or "DTS Connect" then the receiver lights up the appropriate Dolby Digital or DTS indicators, but I get no sound out of the speakers. I've played with the LAV audio settings to no avail. MPC plays the video fine but there's no audio in DDL or DTS-Connect modes, and Windows Media Player crashes imediately when I try to play video while the Creative software is set to DDL or DTS-Connect modes.

Is the Creative software FUBAR or do I need to change some setting to make this work? If so, what do I do? Please help.  

You don't need any special software to bitstream AC3 and DTS. All you need to do is enable S/PDIF Bitstreaming (a.k.a. passthrough) in the audio decoder (ffdshow/LAV/AC3Filter depending on your installation settings).

If that doesn't work, there are a few settings in the Windows Control Panel for your audio device that are related, but they usually are already set correct by default.

Ok, I finally figured it out: Creative's software designers are fucking stupid.

The drivers give the windows control panel panel a "Speakers" section and a "SPDIF-OUT" section... but to configure the "SPDIF-OUT" section you need to hit the "configure" button in the "Speakers" section, and it has to be set to "5.1 Surround" (the default is to "Stereo") or you get the problem I was mentioning above. There is a "configure" button for the SPDIF-OUT section but it's useless because you can't click it. It's greyed out. None of this is mentioned in the manual.

Now that I have the "speakers" section configured to 5.1 and I leave the DDL and DTS-Connect features in the "Cinematic" portion of the Creative "Pro Studio" software off (set to "no encode") then everything works fine. If, however, I try to use the DLL or DTS-Connect features while using MPC then I get no sound. So I leave than garbage off unless I want to give my games a faux-surround effect.

Only reason I bought this card was to improve the audio quality and get rid of an annoying high-pitched noise I sometimes heard when I used the on-board sound. And it did that, but I don't know why Creative had to go and mess up the control panel like this. The SPDIF part should be configurable separately, not linked to the analog part. The analog part should be labeled "Analog Audio" not "Speakers" because there are two ways, not one way, of hooking up your speakers to this effing card! You should be able to use both the analog AND the SPDIF parts at the same time. Also the card should be smart enough to know when DDL or DTS-Connect are needed and when DTS or DD are being passed. It should be able to detect when an audio stream with DTS or Dolby Digital is playing and then turn off DDL and DTS-Connect encoding. But it doesn't. Why? I can only conclude the the software designers at Creative are fucking idiots. For a $100 card I expected better. I am sorely tempted to return this card but I don't know if I'd get more satisfaction form another card.

Yes, Creative has terrible software and driver support.