Here's an easy way to solve all your problems. It's saturnotaku's 9-step method to Creative recovery:
1) Uninstall all Creative drivers - be sure to remove all files and registry entries from your system.
2) Open your case and remove your SB Live - be sure not to touch the PCB too much or else it may infect you with its disease.
3) Go to www.newegg.com
and place your order for a Turtle Beach Santa Cruz or Hercules Fortissimo (or Game Theater) sound card.
4) Wait 3 days for FedEx to deliver your package. In the mean time download the latest drivers for the sound card you chose. www.tbeach.com
for the Santa Cruz and www.hercules.com
for the Fortissmo/Game Theater.
5) Insert new, non-Creative sound card into your PC.
6) Boot your PC and install the drivers you downloaded.
7) Fire up your favorite games and marvel in the phenominal (and bug/pop/click/distortion free) sound.
8) Kick yourself for not having done this sooner.
9) Swear you will never buy another Creative sound card as long as you live.
I was in the same situation as you were. With every Creative driver release, things started to get worse and worse, with both my Live and later Audigy. I said no more and purchased a Santa Cruz and I've never looked back. I don't care how good Creative's future products may look on paper, but their lousy driver/tech support has been enough to drive me away for good.