I know exactly what he's trying to do, actually...he wants to set the Windows sound settings to 5.1 or 7.1 speakers, but the X-Fi drivers to headphones. (Even though that's actually the opposite of what the above images suggest, but those aren't X-Fi control panels, are they?) The drivers downmix the channels automatically, and in newer games where sounds are premixed for 5.1/7.1 speaker configurations (instead of providing 3D sound coordinates and letting the sound card driver handle that, as it should be), CMSS-3D Headphone has a bit more positional data to use its HRTFs with and can provide cues from the extra speaker positions. (There's still a distinctive gap in the imaging from directly behind compared to games that use OpenAL or DirectSound3D wrapped with ALchemy, though.)
Unfortunately, I can't confirm or deny that the X-Fi Titanium HD will present those options in Windows Vista/7's speaker configuration panel. I thought about getting one of those cards, but later decided to play it safe and go for the Auzentech X-Fi Forte (which still hasn't arrived yet; here's hoping it shows up on Monday or Tuesday), which does have analog 7.1 out through a D-Sub breakout dongle (which you won't even need to connect if you don't plan on using a microphone, or want to hook that up through the front panel mic jack).
If anyone has an X-Fi Titanium HD, right-click on the Windows volume icon (or go to Control Panel -> Sound if it's set to classic/icon view), highlight Speakers under the Playback tab, and click the Configure button. If there are 5.1 or 7.1 surround options there, then it'll do what he wants.
