X-Fi 3D headphone function - WOW!

Hi all. I've just tried for the first time my Sennheiser ear buds with the 3D headphone function, and although I didn't believe it, it can actually make the sound appear to come from either in front of you or behind. Amazing! How on earth does this work with only 2 channels??

Has anyone else tried this function and what do you think?

..mathematics.

There's probably an inline chip attached to the 3 jack connectors to the soundcard right?

Yeah X-fi's can do wonders with 2 channels. I worked on a 2 channel set for quite a while and it was almost like 5.0