1. Yes, if Dolby Digital Live is enabled. You should see DTS if using DTS Connect instead, unless the D represents digital rather than Dolby Digital. Whichever one is enabled will encode whatever audio is being received by the sound card, so that the receiver can decode the stream as either Dolby Digital or DTS.
2. That's expected. When playing a DVD and enabling bitstream, allowing the software pass the DD or DTS track found on the DVD to the receiver to decode, this disables Windows volume control because essentially, the receiver is given direct access to the audio data on the disc. Windows is not processing the audio, so has no control over it.
Been a while since I used real time encoding; Dolby Digital in particular, so I can't remember if Windows volume control is enabled, or whether the result is the same as above and the receiver only has control over the volume. I'm thinking that the same applies, but I can't be sure of that.
The sound test file works, because it's likely that is an already encoded file, likely AC3. Not much different than the receiver decoding the digital tracks found on a DVD.
The majority of other PC audio has not been already encoded with Dolby or DTS. Dolby Digital Live or DTS Connect do that in real time. The cracked Realtek drivers are intended to enable DDL and DTSC, but being cracked, Windows and driver updates can screw around with that.