The solution Mwork provided lets you use the updated Emu10K1M.sys file. This is a much better driver than the old so I say scrap installing Liveware 3 like I previously said and follow the instructions below.
To get your SoundBlaster Live to work properly in Windows XP do the following:
DRIVER:
http://www.soundblaster.com/scripts/download.asp?file=http://www.clok.creaf.com/creative/drivers/sbpci/SBL51_W2k.exe
NOTE: You can use this driver for any version of the SoundBlaster Live sound card. (Value, MP3, 5.1..ect)
Just follow the instructions below.
1) Make sure you are running the SBLive drivers(M$Driver.) that XP installed.
If you have already installed previous Liveware software go to Control Panel/Add/Remove programs and remove it.
2) Make new folder on your c: or D: drive and name it "sblive".
3) Put SBL51.EXE, SBL51.W02, SBL51.W03 and SBL51WDM.LIB files in the sblive folder.
4) Go to the Device Manger/Sound, video & game controllers and remove:
Creative SB Live! (WDM) & Creative SB Live! Gameport drivers.
5) In a start/run box type - c: or D:\sblive\sbl51.exe /w <---the "/w" switch is very IMPORTANT!
6) When the installation prompts you to replace the RC1 drivers with the unsigned Creative Labs drivers
click "STOP". The installation will continue. (Sometimes you aren't prompted to install new drivers
but this is not a problem.)
7) When done installing the updated drivers - REBOOT
8) After booting to the desktop screen windows will detect new hardware. When it finishes REBOOT again.
9) Now you have sound!
If there is anything I missed or needs cleared up let's get these instructions as complete as possible.
MINz