Headphone jack issue in W7 ?!?

I SOLVED this in my reply below!

Hi everyone,

I have updated my Compaq Presario V3030CA to Windows 7 Home Premium and only since then I have not been able to use my headphone jack for audio.

I have read many threads on this issue in this forum and elsewhere on the Internet, tried several of the solutions offered but to no avail...

As with many others, I do get sound through the laptop speakers. When I plug in my (perfectly working) pair of headphones, the sound on the speakers does not turn off and of course I am not getting anything in my headphones.

Here is what I see when I go to the Control Panel/Sound. In Playback, I get Speakers - High Definition Audio Device - Default Device. Clicking on its Properties I see the High Definition Audio Device driver is from Microsoft. I have tried to disable, uninstal, update this driver but to no avail. I have also tried to replace it with other drivers recommended in different forums (including from the Compaq website) but that also did not work.

Back in the Playback window, I see the Digital Audio (S/PDIF) icon with Ready state. There is no Headphones icon even when I right click and Show Disabled Devices.

In the Recording pane, the Line in icon shows a status of Not Plugged in with a red arrow pointing downwards.

Any help will be greatly appreciated!!

Thanks,
Mike

Complete laptop specs here:
Product Specifications Compaq Presario V3030CA Notebook PC - HP Customer Care (Canada - English)