I wanted to check and see if anyone else had found other suggested fixes for this problem with the audio.  I too used my Xbox 360 through the Line-in jack on my old XP machine.

I'm running Vista Ultimate 64-bit on brand new hardware (EVGA 680i motherboard with built-in HD audio).  Right now it shows that it is using the Microsoft High Definition Audio Device driver, last updated on 6/21/2006.

I tried the update driver fix that you suggested, but Windows just reported it could not find a better driver (and I have not found better drivers elsewhere).

I've spent a good four hours trying to figure this out, and have just run out of search queries to try.

I appreciate any assistance anyone can offer, and I apologize for bumping such an old thread.

My apologies.  Of course it took five minutes after I posted this to realize that it might help to hunt down different drivers.  I've resolved my issue.