16 bit, 44.1Khz is the industry standard "CD" quality and what is on all commercial audio CD's. I have a recording studio and record in 24 bit 44.1Khz (24 bit gives me some leeway with internal recording software and effects) but when I do a final mixdown its mixed to 16 bit 44.1Khz stereo.
48Khz is used for video so it will properly synchronize with the video frames per second. I don't know what DVD audio is on a commercial DVD.
Dolby is an audio enhancement additon, some use this and some do not. Many movie DVD's have Dolby.
Do you have the latest drivers and support software for the SoundBlaster? First step, make sure you have the latest software.