Although I'm not familiar with your sound card, there are, off the top of my head, a few reasons why the plugin may not be working for you.
The first and most obvious one is exclusivity. The Kernel Streaming plugin requires exclusive access to the sound card which it will not be able to get if some other application has requested access to it. I've seen this sort of thing happen when I've had web browsers open with embedded video players or flash games with audio before trying to play something in Winamp. The only solution here is to close the browser (or sometimes browse away to an audio free page) then restart Winamp noting that, when it's frozen like this you need to kill off its process in the task manager before it will correctly restart.
Secondly, I've had issues with certain revisions of M-Audio drivers, oddly enough, more recent versions that refuse to work with the plugin. The driver reports back quite happily to the plugin, but when I start sending data to it, it just refuses to play. It may be worth trying some older versions of the driver to see if they work.
Thirdly, some cards don't correctly handle all of the sample frequencies you might expect via KS, it would be interesting to know if the plugin can play 48KHz samples via this card.
Finally, I've previously had problems using a Cambridge Audio DacMagic via USB. After a bit of investigation, this turned out to be based on a widely used C-Media USB interface where the standard generic Microsoft drivers didn't support KS. In the end I think I tracked down and installed a generic C-Media driver for it that did support KS, it could be that your card uses the same chipset to provide the USB interface, although, as I said earlier, I'm unfamiliar with your sound card, so this is purely speculation on my part.
I did have a quick Google around for a solution and found this thread which seems to be about this very problem with your sound card, although, for some strange reason I can only see the M-Audio side of the conversation, all of the other posts are blank;
From their engineering response, it does look like KS isn't supported on this card, although their support guy states that none of their products support KS, which we know isn't exactly the case.
You can get the plugin to generate a log file by turning on logging in its configuration panel, the log can be found in the Winamp installation folder and is called "kernel streaming log.txt". If you try to play a file via KS then send me the log it generates I'll take a look to see if it reports anything useful that may shed some light on the problem.
Let me know how you get on.