What are your sources (e.g. DVD, AVI, MKV, live TV) and audio formats (stereo PCM, multichannel PCM, AC3, Dolby TrueHD etc.)? WMC internal player is a bit complicated and there is no simple answer. That's why nobody uses it these days.
Netflix (within WMC), WMC Live and recorded shows, and CyberPower DVD within WMC. So WMC is pretty much it. As far as audio formats, not really sure. I've played blu ray disks and it sounds great now that I switched the card to 2 channel (clearly getting full 7.1 surround now)
I am having a similar issue: I am outputting video and audio from a GTX 760 to a Yamaha RX-675 and when I select 5.1 speakers in Windows, it works for 5.1 sources but stereo sources are still being received by the AVR as 5.1 and so there is no upmixing done.
When you change Windows to 2 speakers, everything is output in stereo and the AVR goes 'oh you must want me to upmix this' and so everything fires on all speakers - but 5.1 sources like DVDs or games are not output in 5.1