How does the surround headphones "emulation" compare to stuff like the freeware Razer software? I tried it for a while, and while it worked fine in my older C2D. my i7 didn't like it much (stuttering, both used onboard audio). Since games seem to have less than stellar surround sound support I ended up ditching it anyway.
No idea about the Razer freeware, but maybe this will help you: https://www.youtube.com/watch?v=04yEtZJVpyY.
As far as headphone post-processing, on my Recon3D it "lies" to the game and tells it that it's hooked up to 5.1 output, and then performs a downmix. If the game does a good job with 5.1, it sounds pretty good. If the game does not do a good job (or support) 5.1, it's generally no different than straight stereo. I've noticed no performance hit either. On my Audigy 2 ZS it does things a little differently, and seems like it's just applying DSP effects on top of a stereo input. It still sounds nice, and has the advantage of working with all applications, but it doesn't seem as "surround-y" as with the Recon's downmix processing. I have the Razer soundcard (the AC-1) in a pending build, and it's supposed to do headphone processing as well - once I actually get that machine finished and get games on it, I can comment on that too. 😊