Actually, the speaker mode setting in Windows Control Panel should be set and kept at 5.1. Surrounder should be set to 2.1 surround off. You probably messed around with the kX Mixer sliders and messed something up.
3537 should work good as well as 3538x.
I suggest you reinitialize the kX DSP, set things up like mentioned above, and see this guide to get your Mic working for a program such as TeamSpeak or Yahoo Instant Messenger:
http://kb.kxproject.lugosoft.com/guide/setup-mic.html
The default kX DSP works good for gaming. For games with EAX support, one thing you can do is rightclick the kX Icon in the taskbar, select Settings/Driver Compatibility/ Filter All EAX Requests (as I understand it, doing this will make the game work like a 3D surround sound option without the EAX reverb). Then, select EAX in the game options.
If you dont like how the EAX filtering setup sounds, you could just select another audio option in the game such as Directsound, and set Surrounder to the speaker mode you want. But, if you want to use stereo sound, in Surrounder set speaker mode to 2.1 and turn surround off. The windows control panel should stay set to 5.1 speakers configration. Any change in speaker configuration should be done from kX Surrounder.
Edit:
Oh yeah, if there is a speaker mode setting in the game options make sure that setting and Surrounder settings are the same.
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