One of the things I own at Microsoft is test development for audio in Windows.  For Vista we did a lot of work to rewrite the audio system and make it more stable and enable more features.  Just recently ExtremeTech published an article on the State of PC Audio.  It talks about the various options for audio including motherboard sound and the various discrete cards available.  If the changes we made for Vista are interesting to you, the article contains a useful drawing of the audio paths in XP and Vista. 

The author complains about the state of motherboard audio.  This is one of the things we're looking to improve for Vista.  In order to get a Windows Vista logo, all machines are required to pass a certain set of qualification tests.  Some of those tests--provided by my team--are there to measure the quality of the audio coming out of a PC.  With these tests, we hope to move the quality of motherboard audio forward.

If PC Audio interests you, be sure to check out these two blogs:

The Audio Fool - One of the people responsible for writing the audio fidelity tests behind the logo.

Larry Osterman - A developer on the audio team.  Also a great source for programming tips and amusing Microsoft history.