You probably have your player set up for digital playback, using the IDE cable for the digital connection. This works fine with Windows Media Player 9, but not for Winamp.
To play CD's with WinAmp, you should have an audio connector between the player and the sound card for analog playback. If you haven't changed this connection, I don't know why it worked with the other Winamp version but not this one.
Unless you intending to use special 3D effects and filtering with Microsoft DirectX DirectSound
, I would leave the default setting on waveOut.