I had no problem getting CD audio working with my Aureal Vortex 2. Maybe the WDM issue is limited to ISA or older VxD drivers? I haven't done extensive testing on this, but I've read in many threads here about people suggesting that you need to use WDM drivers for this purpose.
There were also some recommendations to use a separate WDM card for CD audio, in addition to another card that uses VxD drivers. I found this to be a poor solution, because for WINMM to use the WDM driver for CD audio, this device must be selected as the primary output. But when you do this, you must then choose exclusively to use either a VxD device or a WDM device; they cannot both be used at the same time. This is a problem when you want to use, for example, a VxD-enabled Aureal card for A3D or a Creative card for EAX.
The only real truth I found from the research I've done is that the digital audio mixing, instead of analog mixing, are indeed restricted to WDM drivers. There may be some value to this, but I wasn't able to find a use case for comparison. I'm not an audiophile and probably wouldn't be able to find a difference if I were to try and look for it on me own always. I would welcome any recommendations on what this feature is used for and how it can affect audio quality.