ASIO

Steinberg  developed  the Audio Stream Input/Output (ASIO) architecture to create a low latency, high performance, easy set up and stable audio recording environment.

It is a proprietary protocol.

You can only use it if your hardware supports it.

ASIO bypasses the normal audio path from the user application through layers of intermediary Windows operating system software, so that the application connects directly to the sound card hardware. Each layer that is bypassed means a reduction in latency, the delay between an application sending sound to the sound being reproduced by the sound card. In this way ASIO offers a relatively simple way of accessing multiple audio inputs and outputs independently. Its main strength lies in its method of bypassing the inherently high latency of operating system audio mixing kernels (KMixer), allowing direct, high speed communication with audio hardware. Unlike KMixer, an unmixed ASIO output is "bit identical", that is, the bits sent to the sound card are identical to those of the original WAV file, thus having higher audio fidelity.

Source: http://en.wikipedia.org/wiki/Audio_Stream_Input/Output

ASIO allows you to bypass the mixer of the operating system.
This improves latency and allows for a transparent path between the audio application and the sound card.
Using ASIO is not necessarily equivalent to bit perfect playback.
It can deliver a bit transparent path between the output of the media player and the input of the soundcard but it cannot control what is happening up- or downstream.
If you apply some kind of DSP in the media player of if your sound card resamples, the entire chain is not bit perfect.

The audio stream transferred by the K-Mixer (mixing software implemented in the operating system's kernel) may not be bit-exact; it is often resampled because the K-Mixer can only process audio streams that have the same format (48kHz/16-bit). And the resampling process worsens the audio quality. The windows plugins like Volume, Balance etc.. are only working with 48kHz music signals. Even if the output is bit exact, the resampling algorithms may induce jitter resp. signal alterations.


Source: http://www.aqvox.de/Asio-USB-Audio-installation-e.htm

Bypassing the XP Kmixer seems to be a must in the audiophile community.

However there are claims that this is not needed because XP is able to deliver bit-perfect output.

Windows XP will transmit up to 96 kHz, 24-bit audio bit-transparently (perfectly, bit-for-bit), when the media player, device, and OS settings are configured correctly. This article will guide you in properly configuring your operating system and media player.

Benchmark Wiki

If you want automatic sample rate switching and have a sound card supporting ASIO, this driver is your best bet.

In general WASAPI doesn't provide automatic sample rate switching with discrete soundcards.

ASIO4ALL

ASIO4ALL is not ASIO but Kernel Streaming.