You have part of that right. There are two different ways to do it. If you connect it digitally you will only get 2ch sound from the PC. The Soundblaster cards, and most cards for that matter, do not have real time Dolby Digital encoding (DD Live).
The only way to get 5.1 sound from your Audigy is to use the analog outputs. You would need three cables like
THIS and a 6ch input on your receiver.