Hooray! That's great news. Thanks for the kind words, but this is not genius on my part but experience from many years in the school of hard knocks. I can try to figure it out, but it's always a guess when I haven't seen your system.
1) You say you downloaded the driver from Toshiba, but you don't mention installing it. That's OK.
2) You uninstalled the old driver, I'm guessing from Programs and Features something like "Conexant Audio Driver".
3) No SmartAudio HD2 device in DevMgr probably because the uninstall in step 2 removed it. I told you to do both because some drivers use one or the other and some use both. The High Definition Audio Device is from Microsoft and will be on any Vista system with an HD Audio compliant controller.
4) It works now since the audio chip is acting as an HD Audio standard controller and Vista knows how to handle that.
On my system, in Device Manager under Sound, I have both the High Definition Audio Device and a Realtek High Definition Audio device. The Realtek audio chip that I have supports the HD Audio standard and Vista recognizes that and installs a driver for it. However, Realtek provides their drivers to access sound features on their chip which are outside the HD Audio standard. So, I have two device drivers for the same audio chip that work in harmony (heh heh).
Your system apparently has a Conexant audio chip that is also HD Audio compliant. Vista recognizes this and installs the High Def Audio Device which can handle all of the standard features. I expect that the SmartAudio HD2 driver is not the proper driver for your audio chip, or it was buggy since it did not work in harmony with the HD Audio standard driver. If you did not install the Toshiba sound driver, then you probably won't see a Conexant Audio Device of any kind in Device Manager -> Sound. That would be OK since all that you need is the standard HD Audio function of the chip. Installing the Toshiba driver might enable some extra gee-whiz features, but probably nothing you need and there is some risk of creating another conflict.
Yes, these computers are truly "amazing", where I am referring to definition 2: To bewilder; perplex.