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I'd like to watch a video with sound on one computer, share the screen, and have the sound heard by the other computer, not going through the speakers. i.e. it should transmit the video from my screen and the same sound that's going to the speakers, right off the sound card.

It is possible to do on XP, but not on 7.

I have tried to use the stereo mix as the sound source, but it seems that skype blocks that.

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If your goal is to watching streaming video on another computer, why not use a proper video streaming solution? Unless you need some kind of live interaction with the other computer, proper video streaming will offer better quality since it can be buffered. –  Lèse majesté Mar 22 '12 at 10:08
    
What do you mean? what would that solution be like? Basically I want someone doing sharing screen on skype to be able to also hear sound off the sound card, properly synced, not from the speakers -> microphone of the source computer. –  fastmultiplication Mar 24 '12 at 3:19
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You would want to check out Virtual Cable with a guide to configuring it HERE.

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