SoundMAX Integrated Digital Audio problem

I was having an issue with AC'97 audio driver which refuses to install (although it says that it's installed after series of system nagging screens for untrusted driver installing) and then Windows installed some driver via Updates which doesn't appear to work correctly. There is a delay in audio and I can't even click on these Microphone items here:


Has anyone had this problem?

EDIT: Okay I've tried to install again AC'97 driver and it succeeded without any warnings. When I restarted the computer I got this but now with no sound:


All is clickable so it doesn't crash anymore. For the no sound problem that I'm currently facing, I've tried to find Sound Manager to see its settings but I found it only in C:\Windows directory and it doesn't open when I double-click on it. So it appears that it is wrongly installed or something prevented installation to do so. I've tried to uninstall it and then install it again, but the problem still remained - the only difference now is that Microphone (Realtek AC'97 Audio) became Ready and Line In became "Currently unavailable".

BSOD, can't shutdown properly - Tech Support Forum
Okay I've made it similar like this above (the difference is that I installed for Windows 2003 driver instead), but next problem occurs - BSOD at shutdown which is causing smwdm.sys. Seems like other people had the same problem but nobody tried to resolve it up to the very end. S**t...

XP drivers are not compatible due to some sound functions are processed differently than XP. We saw a lot of sound incompatibility on the Dell forum when users converted to Vista. The ONLY option if there are no Vista/Win7 drivers is to install a separate sound card that is compatible.

Forcing non compatible drivers to install can have untold consequences.