I missed Dolby Headphone so I picked up a Xonar U7.
Too bad I can't actually get it to DO any legit Dolby Headphone. Not sure if it even can. It seems like it's crippled to only doing Pro Logic due to not being able to feed the Dolby software actual discrete multi-channel surround. I think everything gets bottlenecked down two channels before Dolby sees it, then gets upmixed back to pro logic surround.
It's got three outputs, "Headphones, Speaker, and SPDIF".
1. The "Headphones" output can only be set to 2 channels. No "Configure Speakers" options in windows or the Xonar software. So you just supposed to set it as your default 2-channel audio device and trust that somehow the game is still going to decide to send discrete multi-channel audio to it so Dolby Headphone can work properly? Can't seem to get it to work - everything sounds like pro-logic. The only way I could see that working was if Dolby Home Theater v4 somehow got the multi channel signal FIRST (before the Xonar), and then mixed it down with DH and passes it to the Xonar's 2-channel device.
2. The "Speakers" output CAN be configured to 5.1 or 7.1, but it splits that output between 5 analog jacks at the back. If you take a line out from the red/white RCAs, you only hear the front L/R channels of the mix.
3. The SPDIF/optical output is either PCM or Dolby Digital. No "configure speakers" or number of channels options. The Dolby Digital is at least correctly encoded and without lag, but the PCM option doesn't properly apply Dolby Headphone.
How does the Xonar U3 work? I think you can configure it as multi-channel in windows right? I assume the game sees it as a multi-channel device and sends it multi-channel audio, then the U3 software runs it through Dolby Headphone (perhaps encoding it to DDL first), then it runs that 2 channel Dolby Headphone signal out both the 3.5mm out and the toslink out (the latter as 2 channel digital PCM but with dolby headphone already mixed in still?)