I believe this must be completely dependent on your audio card. As mine at the moment is completely latency free or at least inconceivably low.
You can pick up some pretty good USB sound cards nowadays without the need of anything internal or modifications. However you may just want to look at getting a small mixer with just a few channels and monitor out.
I think it's just an issue with the software. In certain applications I can listen to the audio latency free but software that I can use to record adds latency
Ah, when you said that the 'Listen' option in the windows dialogue added latency, there really isn't anything lower-level than that. So if there's latency there, it's not likely solvable.
When I use a 1/4" to headphone (I forget the measurement) and enable "listen to this device" it adds latency. But when I go to the speaker properties and unmute the front red line it it does not have latency. I'm assuming the "listen to this device" thing adds latency because it's software but unmuting front line in does not because it goes straight from line in to line out. I can use this way on my desktop but my laptop only has a combo port. I can plug my headphones in and guitar in at the same time if I use a headphone connector on my guitar.
Bit if an update. Audacity on Windows using MME has latency and when using the DirectSound option playback doesn't work. But I pulled out my laptop running Fedora and I can use playback in Audacity with no latency. Once again Linux comes out as the victor lol.