That's what I used to do. My audio card is a M-Audio Revolution 7.1 and it has the standard headphone type jacks, and coax digital out.
So I used to have PowerDVD send out the DD or DTS signal digitally over to my decoder. Which wirks fine actually, but I just discovered a feature of PowerDVD for Doby Compressed Dynamic range, which basically makes it so you can place the volume at a level where you can hear the voices, while at the same time it will not destroy the house's foundation when an explosion occurs (it's also useful when I want to watch a movie, and not wake everybody up each time someone shoots at a bad guy).
My receiver lacks that feature unfortunately.