The driver you linked to is an old version "R2.25" released on 10/21/2009. It is probably the same as the version you already have. The latest version is "R2.68" released on 3/30/2012. You needed to go to the download page at the Realtek site.
Click on the "Downloads" link at the top of the page. Then click on "High Definition Audio Codecs (Software)". Read and accept the warning. Then click on one of the download sites for the Windows version (64bit) you need.
However, from your description of the problem, a new sound chip driver may not solve it. VLC plays the commercial CD with no distortion. How about Windows media player? If you get distortion with WMP also, then your Windows sound system codecs may be damaged (VLC has it's own codecs).
Windows has a way to check and replace it's damaged files, but you need the installation disk. This 'fix' gets more complicated if you have applied any services patches. Since you have not applied any patches, this will be a simple process if you have the disk. Search the WEB for instructions or post back.
Maybe you just need to apply the Windows updates and patches (Microsoft software only, get non-Microsoft software and hardware driver updates from the appropriate vendors) and your hardware's updates and patches (if any). But take things one at a time. I suggest checking for damaged Windows files first, then the new sound chip driver, and finally the updates and patches (any from your hardware vendor first).
As for the low volume, are you sure your hardware, Windows, and applications volume controls are set properly?
As to the CDs burned with WA, others have reported problems (use the forums' search feature). They were usually related to the total pathname (location + filename) being too long.