Yea, I was just checking on the audio cable, because i know the drive has played sound without it!
Also, I've tried VideoLAN and it worked, so I'm quite happy! However, I'm still at a loss as to why PowerDVD wasn't working? As for the format and reinstall, I've done that quite a few times before, this is my first run on XP though before I was using windows 2000 and it's only a few months old.
I do know what I'm doing when it comes to computers though, don't get me wrong! I've made a few for friends but this problem really had me stumped so I thank you all for the help!
I've had problems with codecs before, I think the problem was the NIMO codec pack where it made sound on some avi's crackly. That was when I moved over to "codec pack" (www.codecpack.com) which seemed quite good, haven't had any issues with it yet, but to be on the safe side here I've uninstalled it and only installed DivX and Xvid downloaded from their own sites.
My motherboard is the Abit NF7-s v2 but I don't think I'm using the latest drivers for it, never had problems with them in the past though.