If the Shark007 codecs are installed, you should not be installing any other codecs. LAV and FFDshow are installed by the Shark007 codecs. If you have installed these codecs separately, all codecs should be unistalled, and only install the Shark007 codecs.For Windows 7 . . .
Although M2TS files can be bitstreamed in the Windows players, the OS makes it difficult. The easiest way to handle these files is to convert them to MKV files. There is a tool on my Tools page called Metafox that can do this in a single step.
To bitstream the M2TS file, press [Reset All], choose the [x] SUGGESTED settings checkbox, go to the SWAP TAB, disable the Microsoft Audio decoder and on the Audio TAB, select the bitstreaming selection provided.
IF your OS is 64bit and your player is Media Center, you may also need to disable the Microsoft Video decoder on the SWAP TAB.
I just noticed.. you are on Vista,
For Windows Vista, I will need to some time to bootup that OS and test the scenario.
EDIT - check Control Panel | Sound [your audio device] and under the supported formats tab to be sure the HD formats are listed.
If they are not listed there, you may have an EDID problem