MW - here's a shot in the dark for you to consider.
Like many other guys on these boards, I build all my own PC systems from scratch. My current system has an Asus A7N8X-DLX mobo with onboard sound.
I can play sound files (.WMV, .WAV etc.) using various programs like Windows Media Player or Winamp. I can also play CD audio files, but... in order to do that, an extra cable is needed, linking the audio out port on the CD/DVD player to a port on the mobo. I think this is because the hardware is playing the audio CD, not a piece of software.
I wonder if your laptop has the equivalent of this cable installed?