Windows has only a limited audio device support in native Remote Desktop connection so Virtual Cable devices may not be accessible via RDP connections.
If target (remote) system is a workstation (Windows 2000 Pro, XP, Vista, Win 7), Remote Desktop session is established as a direct/console session too. A local user, if any, is forcibly logged out and you are logged in instead, having his/her local desktop. To access Virtual Cable devices via MME/DirectSound interfaces and control VAC driver from the Remote Desktop connection, you should specify "Leave at remote computer" for the "Remote computer sound" at the "Local resources" tab in the "Remote Desktop connection" dialog. When you request a connection, a simplified form of this dialog is present, containing only computer and user names. To view the "Local resources" tab, expand the dialog by clicking the "Options" button.
If target system is a server (Windows 2000/2003/2008 Server etc.), it creates a separate logon session by default. A local user is not disturbed by a remote connection. Only a default local audio device is redirected to the new session. There is no way to use and control other local audio devices in such connection. To access them, you should connect to a "console" session like workstation systems do. It is possible using mstsc command with the "/console" option. In XP SP3, and Windows 6.x, the /console option is replaced with /admin.
If the host runs 2003 Server system and there is no "RDP Audio" playback device in a remote session, please check Terminal Services configuration at the server (Start - Services - Control Panel - Administrative Tools - Terminal Services Configuration). At left pane, click Connections, right-click RDP-TCP at right pane and click Properties. Open Client Settings tab and make sure that Audio mapping in Disable the following group is not checked.
In Server 2008, there is no way to connect to a console session via RDP. To see local audio devices, you should use desktop sharing software.
See Windows Help for details.
Please note that in most cases there will be no audio signals passed over the network between local and remote computers. Even when you use a KS application that sees Virtual Cable devices, all audio operations are performed on a remote computer, no audio data are transmitted to or from a local computer. It is similar to a situation if you are using VAC on a computer without a hardware audio adapter.
As a kernel-mode driver, VAC may not work in some virtualized environments.
Partial virtualization is enough to use most user-mode software (Web and other network servers, remote desktops, distributed calculations) in a virtualized environment. For user-mode applications, virtualization software maintains several separate environments. But there is only a single system kernel so in most cases you cannot install a kernel-mode driver like VAC on such environment. In most cases, the system warns you but in some cases the installation might be successful but the driver will not be loaded.
If the environment is virtualized partially (at user-mode level), you cannot install VAC under it. But if you have full access to the host machine, you can install VAC on the entire host, and then all virtualized environments will be able to use VAC.
In a fully virtualized environment, you have a completely separate OS, with its own kernel, so you can separately install and use VAC on each virtual machine of this type.