A little background...
For years I've played FPS games on PC, COD4, WAW, Black Ops, BF3, and now MW3 PC/Xbox.
I started my lifestyle of improved sound in gaming during WAW (World at War) with Logitech's G35 headset and into Black Ops, then I purchased Astro A40s and the wireless mixamp.
Coming into MW3 PC I was able to get the footsteps to stand out very well by tuning the sound with the equilizer on my onboard sound card. However, the "hackers" on MW3 PC were just getting to be too much for my tastes, so I decided to get into MW3 on Xbox...
I quickly realized the sound on the Xbox was complete garbage for hearing footsteps compaired to my PC sound. I thought if I was able to feed the Dolby 5.1 sound from my xbox to my PC then remix the sound to the way I like it on my PC I could get my beloved sound whoring ability back to "You're a ********* hacker!!!" quality.
I quickly found out there aren't (or are there? anyone? Bueller?) any sound cards that decode 5.1 through an Optical input. After a TON of searching on Google I found what i needed in an obscure forum that I am unable to site. I can do the sound from the Xbox and PC at the same time and have Dolby Headphone 5.1 for both PC and Xbox without moving/disconnecting cables. Here it goes...
Buy a soundcard with Dolby headphone to maintain DH on your PC. (Xonar DG $25)
Use the A40 PC splitter cable.
Turn off DH when using the Xbox on when playing PC.
Xbox optical out>MixAmp>3.5mm Headphone out on MixAmp>Mic/Input on soundcard>Remix sound on PC>3.5mm Headphone jack on soundcard!
Since the Dolby Headphone signal is analogue stereo, it easily passes through the soundcard and can be remixed to pull out the footsteps and reduce the bass that crushes positional cues. I have a set of settings that work great.