From my PC I often show videos on the TV (and audio to the main speakers) for my kid. At the same time I want to run Skype on the monitor. Doing this is possible with the video but the audio comes out of the same jack and blends.
So my end result I'm wanting is to have dual or separate audio for the audio out of the back of the PC (for the TV's video) and headphones for Skype.
Is this even possible???
If you use a headset with built in microphone, you can set skype to output only it's audio to your headset. I do this in games all the time that don't support audio chat. I have a bluetooth headset and I simply change the audio output in the settings of skype to use my headsets speaker and not my PC speakers. That way you don't get feedback loops. Skype will still (annoyingly) keep making it's silly range of boops bips and biddles when you start and stop calls through your pc speakers though sadly.
If you want a simple way to add a second sound output device, there are plenty of cheap USB "sound cards", or you can use USB speakers/headsets.
Alternatively, if you're running video over HDMI you could probably set that as your output device.
It can be difficult to split audio if the programs don't provide for audio device selection, but for something like Skype that does it's a simple matter of having more than one choice.
I do this kind of thing all the time (play videos on the TV through HDMI for the wife and kid, while I'm working and using Yahoo messenger (and its various sound alerts).
It's very easy to set up if your videocard has an HDMI out that supports audio as well (I know from experience that nvidia cards older than the GT 200 series have no audio support) and a movie player that has the option to select sound sources (I use the media player classic that comes with the K-lite codec pack).
Just set your PC's sound card as the main output device, but configure the media player to use the TV for audio output (instead of System Default). Voila! Only the movie's audio will be heard on the TV. Everything else will come out of the PC speaker.