Update -
I logged a call with MS support about the inability to select Analog playback for any optical drive (4 different drives from 3 different manufacturers on 2 different PCs) in Win 7.
MS have now admitted it's a problem (the support team can't select Analog playback on their test PCs either) and that they now have a research team looking into it.
It's only taken 2 weeks, several emails and phone calls to get this far, but now I'm cautiously optimistic that this might actually get resolved!
SD