This will only work with wdm drivers, and usualy only on newer pci soundcards. (SB 128 live, etc...)
If you want to use redbook audio with ms-dos games, sadly you still have to burn the disc for it.
I wish someone would make a hardware based cd-rom emulator with redbook audio support. (with analogue audio out)
Sadly I doubt this will happen anytime soon. (I might have look into this after I finish my midi projects)
One workaround I've seen people do is have two soundcards, one for MS-DOS, one for windows. Have the line out for the dos card go into the line-in for the windows one. This will allow redbook audio to work with MS-DOS (in windows), but not games will like this.