I have a couple of questions about the internal player....

how do we use plug-ins, or dsp's or even sound enhancements like auto level. Or is this not possible while playing in this manor?

The majority of the plugins you setup via windows media player will work with the internal player. The only exception is crossfading which is not possible unless you use Winamp.

Sounds good, then how do I use them? I was hoping that I could use the audioscrobler (Last.fm) plugins while using the "internal" player.

For some reason I've been having problems with Winamp and my USB audio card. It was working wonderful, then over the past few days skips and stutters. I tried a different sound card output and performed better, with digital output to my receiver, but the rest of the house was offline. So, the options are slim for the moment, at least for now. The nice thing of the USB sound card it plays to the digital and analog outputs at the same time, so it's perfect fo my setup. But winamp plays for a while, then starts the stutter again, or bad dropouts.