[VocaloidDude]

I always hear people in the gaming communities I hang out with talk about their stupid headsets and sometimes these headsets have "surround sound". I have no idea what that is, but just from the sound if it it sounds extremely gimmicky, and I as an audiophile have never read anything about "surround sound headsets" as having good quality. In fact, I never really read about them at all, nor do I believe that headsets would have good quality in general. I mean, it's pretty obvious that they suck, but I'd like to be able to say that to people when they bring up these abominations of audio equipment.
 
If you want a good audio setup for gaming get headphones with good soundstage and get one of those attachable microphones. It makes me cringe, I'm always having to tell this to people, inform them about the truth of good sound quality.

 

[alies]

From what I understand you are correct. They are either Virtual Surround or have multiple cheapo drivers per ear. In both cases they have integrated cheapo DAC+amps+DSP as all the headsets I've seen in this class are USB.

 

[sassywhat]

It's usually implemented as a DSP and is literally the same thing as you doing it in software (or buy a dedicated box). 
 
In any case, I've never been impressed by anything that claims to simulate surround sound. I doubt it's going to be effective unless it tracks your head movements, and the systems that track your head movements are rather expensive.