>> is all this just in my head
unfortunately, this is not in your head, but in Creative Labs engineers'...
audigy2 design is terrible in terms of 'marketing vs technology'
that is, under official drivers, the sound is played back in 24/96 or 24/48 -only- if there are no effects applied. this happens, because the audio data isn't processed by the audigy2 chip (which is practically the same as audigy1), but gets into Creative CA0151-DBS chip (which is a black-box... we were unable to find any information on this chip).
if any effect is applied (including EQ), this makes the drivers to route the signal to 10k2 chip, which cannot handle 24/96 or 24/48, so, the data gets downsampled to 16/48
at the moment, kX Drivers cannot support 24/96 playback or recording because the CA0151-DBS chip is totally undocumented. we are working on this issue.
but, nevertheless, if 24/96 is supported, the same limitations of the card will still apply
[that is, no 24/96 support and DSP effects available simultaneously...]
/Eugene