If the output volume levels (Wave, Main, etc) in windows are set to maximum, then Kmixer does not need to dither/truncate the 16/24-bit signal in order to provide a reduced volume level. Another point to not is that Kmixer resamples every piece of audio in your system up/down to 48Khz. The resampler algorithm is actually quite poor. This is one reason that Kmixer is also called 'Kmangler', as it is often the reason SQ is lowered, even before you get the sound out of your PC. ASIO/Kernal streaming are ways to bypass Kmixer and allow bitperfect, un'mangled' audio output. I have read, that if you resample your audio (which for Mp3s/CDs is 44.1Khz) up to 48Khz using a resampler plugin inside Winamp (per say), that Kmixer sees that the signal is already 48Khz and leaves it alone. This sort of circumvents the two anti-bitperfect issues we had earlier.
1. Full volume on all sliders - prevents dithering/truncation of signal (1st issue avoided)
2. Resample the audio using a high quality resampler (AudioBurst PowerFX IIRC - theres 2 version, use the free one) inside winamp to satisfy Kmixer that the sample rate is already 48Khz and it doesnt have to resample. (Prevents poor Kmixer resample algorithm)
[Digital volume reduction is done by changing the actual bits in the source signal - therefore a reduced volume level signal cannot be 'bitperfect', as the bits have been changed slightly. Analogue volume control is done by attenuating the actual output voltage rather than changing the bits of the audio data.]
Do a little research into the above...I believe it has worked for some people.
Chaintek AV-710 can be had for about $30. It can be flashed with Audiotrak Prodigy 7.1 drivers, turning it into a bitperfect source, but corrupting the analogue output stages (unlash flashed back to chaintek firmware). I believe the audiotrak drivers are written to avoid Kmixer entirely, hence giving you bitperfect sound for $30. I realise it is a PCI card and not onboard, but its just another option