Microphone vs. Line in port

[I4one]

i don't know that specific mobo per se, and I don't know if it's Onboard sound or a Card, but here's some info;
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The Output Mode determines what type of signal is sent to the line out jack. When Autosense is selected, the Line-out jack will sense whether the jack plugged in is S/P DIF or analog stereo. When Analog is selected the output will be forced into analog output. When Digital is selected the output will be forced into digital output.
S/PDIF Ouput allows the output to be sent to both digital and analog devices, or to digital devices only. If set to digital only then the output will only be sent out in digital format, no analog signals will be sent, allowing for quieter playback and recording.
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these settings are found in Device Mangler >> Sound, Video and Game Controllers >> Sound Card >> properties >> settings tab

also review your Control Panel >> Multimedia (in 98, but XP who knows?) >> Audio Tab >> Advanced Properties >> Speaker Setup and use the Drop down box to choose the Setup

edit;
more --
If you see this 3D Audio Tab under your Sound Card in DM -
The 3D Audio Tab simply allows the user to choose between Headphones and Stereo Speakers for their listening device. It is recommended to be sure that is set to the proper setting as the SBAPCI64V uses slightly different algorithms for reproducing 3D sound on standard speakers than headphones.