I've been using Windows XP for several years then Vista for a month (on this same machine). In both I could play media player through my head phones then change the default device to the digital output and start other application and their sound would play though the digital output.
In Windows 7 using the same equipment, the latest Realtek drivers
(or even the windows provided drivers) and the same method and settings, all I get is all the sounds being played on the same output device. It will switch the device but it wont separate them.