Download the updated drivers off Windows Update. Works like a dream, at least in RC1.

In RC2 you do the same thing as in RC1 - Sound Properties and change the config from desktop speakers to Quad speakers.
 
Worked for me anyways

It seems like you can only have one input (Wave in most cases) on all 4 speakers. You can change which input by choosing it in the Play Control, Recording properties control panel, but I can only choose one at a time. It looks like the "What-u-hear" setting of livware is missing. Anybody have any way to get 4 speaker output from more then one source simultaneously (ie line in, aux, cd, & wave)?
 
To add to the xp weirdness - When I play an audio file from WMP it plays on both sets of speakers, but in winamp, it only plays in the front. This is with the WaveOut plugin. I will try others later to see if it makes a difference.

Argh, i too can't get 4 speakers to work. LiveWare3 for Win2k is a no-go, and with the original drivers from WinXP RC2 I never get sound from the rear, dispite setting the speakers to quadrophonic.
 
What else can i try? I thought WinXP was a little more developed than this .

Actually it's not Microsofts fault. Blame the people like Logitech and Creative (esp. Creative.) If anything you should thank MS for making basic drivers period. Yeah, the SBLive driver that comes with XP is pretty lame and basic but at least they made a driver. I'm still waiting for Creative to make Win2k drivers that are as decent as the Win9x as they promissed they would with the Prince of Vaporware called Liveware 4...
 
What a lot of companies do is say they don't want to work on drivers for an OS until it's finalized so some companies will either start on drivers when the XP code is finalized (from the news it looks like before the end of the month) or even after it's on sale in stores. Or maybe some companies are just slow to finish them as Nvidia's newest drivers which should be out this week actually have native XP support in them for once.

I know what you mean NaughtyNu, and it's really frustrating, because here we have a good working OS but it's being hindered by buggy drivers. But I guess it's a bit too early for us to comlpain because the gold code has not been released yet. But still I think it can be expected that many companies, as creative like you said, won't even have proper drivers before the customer buys a PC with WinXP on it, which is less then 4 weeks away. Even though their Live! card is used by so many.

They worked for me in windows, games and media player, but not winamp. In winamp, open the preferences, goto output, dbl click the direct sound output, and set the output device to the sb live wave device. this fixed it for me.