The AD700 was my first awesome gaming headphone, and I personally think it hits the gaming sweet spot for a very affordable price. I heard that it fits wider heads better in stock form, I have a bit of a narrower head but by flexing the "arcs" and putting a rubber band between the wings, both with the goal to have the top and bottom of the earpads rest flush with my head, I achieved what was probably the most comfortable (for me) gaming marathon headphone. The wings were kinder to my head than any headband (or ear hook). For music though... the sound lacks body, the bass is very tight but kinda recessed, most of the headphone's frequency response is kinda "laid back." Which can sometimes be a good thing, but I alternated between headphones and speakers for music till I upgraded to an AKG, which has soundstage AND isn't as laid back and has more bass body. Still, I think the AD700 (and Koss KSC75) make for GREAT VALUE, they stand up well against average headphones and make a good reference point in the future to ask yourself "is this new headphone worth it over the AD700?"
The U3 does offer surround, using Dolby Headphone processing, but you'll probably hear an improvement with the AD700 if you get a FiiO E5 or E6. Those are cheap amps, but the main reason you'd want them is because the U3 has pretty high output impedance while the AD700 has low dampening ability, putting a little FiiO amp between them will benefit you with less harshness and distortion, sound clearer and more detailed. The other benefit is the little FiiOs have a little bass boost option, if you want it sometimes.
My favourite pairing with the AD700 was my Recon3D. I plugged the phones straight in, and I thought it was awesome I could use the one processor for my Mac (movies and Starcraft II), Console (Xbox360, but PS3 is supported too), and Windows (hardcore games). Using the bass boost and setting the "crossover point" low sounded pretty awesome, the ambiance of Metro 2033 blew me away.