Thanks for all the feedback.
Since the Dolby Decoding is being done by the DVD software that's what made me start thinking that the sound card (onboard or PCIx) really doesn't matter since the audio signals are being split by the software and being passed to the applicable channel. What I thought that could make a difference is the SNR, op-amp boost or "upsampling" of a stereo signal to a surround sound format. At that point the drivers (software) is doing much of the work.
Saying that, PowerDVD does have software to upsample stereo as well so even that is starting to be a non-issue.
I don't use an external AMP for my Home Theater. I have a Creative 7.1 sound system that works very well for my size room 20'x15'. The system is fed by a 7.1 Analog sound card. Whether it be Creative, Asus, C-Media or whatever the bass unit doesn't care. It's just looking for analog 7.1 inputs(Front L/R, Rear L/R, Side L/R, Center/Sub). Video is fed to my Projector via HDMI. All my content is digital, either online or Blu Ray/DVD.
When I see sound cards that say "support Dolby Surround" or "Dolby Digital" I guess that means the sound card is capable of outputting the necessary amount of channels. It's not saying it has special hardware or drivers for Dolby per se. So ANY sound card that supports 7.1 can be said to support Dolby. As far as DDL, yeah, I don't have any optical inputs from external sources going to my HTPC. I cut the cord to my Satellite and Cable subscriptions. Purely online or DVD/Blu Ray.