Interesting info. I did a few more rounds with CMSS-3D and EAX disabled, and that really helps. Without all the cheesy reverb, I can hear what's going on. Compair to using no DSP, the sound sort of seems larger and more open, and I could maybe hear someone coming from farther sway. In a game like CS or Battlefield, and might give an advantage. On the other hand, it still sounds really bad. Everything is so shrill, it's just not pleasant.
After switching back to straight SPDIF again, I have decided that no DSP still has sharper positioning on my system, and is especially better for telling exactly how close something is and where they are when they are close. In ME3, that is much more important than hearing someones footsteps a little farther sway. In fact, it may even be that I do not hear anything farther away with DSP, but everything just sounds farther away.
I think at this point, I'm perfectly content to simply not use any of the X-Fi's "advanced features" for gaming. I will keep it in the back of my mind that I want to try out SBX at some point, but it isn't critical.
Oh, about the stereo mix to digital out.. I googled it, and it seems to be under advanced features for newer, Creative cards I do not have.