Before anyone tries to blame hardware, my same hardware config worked fine under Vista Home Premium x86.
I notice the popping and clicking THE MOST when I turn on iTunes visualization but it happens when iTunes is not even open, like playing through Napster (flash player). The default MS drivers were crackling like hell, I put up for it for weeks and finally did something about it today.
I just downloaded the 2.33 driver from Realtek today, it helped but did not improve.
Someone mentioned an obscure setting further up in this thread so I went poking around in the Control Panel > Sound area.
Under Control Panel > Sound > Playback Devices > Properties on Speakers > Enhancements:
I tried checking "Disable all sound effects", this seemed to help but not fully resolve the pops and clicks.
Next, in the same place I checked "Immediate mode" and it seems to have cleared up all the popping... does this help anyone else? So far so good, I just hope it doesn't come back again, like has happened to everyone else...
I am still using the 2.33 driver.