I assume you are clicking on the run win95 version of the dig. I used to have the same problem, with the same sound card and windows version.
Have you installed the creative liveware or are you running th windows drivers?
In the liveware they have, I can't remember exactly what creative called them, but some realmode drivers, that make the sblive emulate an sb16 in realmode dos.
I think then I just ran the dos version, can't remember if I used the launcher or a dos window, or actually started the computer in real msdos.
If you can't get the sound working properly in windows, restart the computer in dos, after having installed the dos sound drviers (you will also need your cd-rom drivers - they can be found on the win98 startup disks).
Let me know how you go, when I have some more time, perhaps I can give a more thorough explaination.
Trying to get dig.mixnmojo.com back up.