The first one is easy. You unplug the power, start holding down the power button and then connect the power back on. I did the firmware upgrade without a hitch. You'll be fine
As for the positional cues, did You enable surround in the Control Panel, and if You did what value did You set?
I reckon the dodgy Engrish message was not meant for public consumption - it looked more like a debugging message if the firmware upgrade went balls-up and I was never supposed to see it. I ended up rolling the dice and Ctrl-Alt-Del'ing out of the firmware upgrade without touching the power cord or power button, and the second attempt was successful. But it simply reinforces the doubts I have about the X7 in terms of reliability - too many things go wrong too easily and it's a high-risk gamble when it messes with a $1000+ headphone audio setup.
The firmware upgrade seems to have resolved the Dolby Digital, Bass Boost, flaky power button and random standby mode issues...for now. Everything is functioning as expected, so I'm disinclined to return the unit. I really don't want to, I just want the damn thing to work! The most concerning thing was standby kicking in randomly in-game - if that crops up again, it's curtains for the X7.
Positional cues is more of a head-to-head comparison between the X7 and the three MixAmps I own (first-gen wired, wireless 5.8 and A50). Regardless of the SBX settings (SS @ anywhere between 80 to 100%) or using Scout Mode, the X7 gets pantsed by the 5.8. My A50s are surpassed by the Philips X2 + Creative X7, which was my intention, but more-so by the X2s paired with the 5.8 for positional cues.
Using
Garden Warfare as an example (I own it on PS3, PS4, XB1 and PC, so it's handy for testing), it has wonderful in-game audio with strong positional cues, as long as your health is high. Setting up a Garden Ops match on Sharkbite Shores and planting Scaredy-shrooms at the back - you can get them roughly at 4, 6 and 8 o'clock to test left-rear, rear and right-rear. From directly behind, I can almost feel the bullets going through the back of my head from a discernible distance on the 5.8. The same applies to the A50s. On the X7, it sounds a lot shallower and the direction is more difficult to pinpoint. The difference doesn't translate as cleanly to the MP modes like Gardens and Graveyards because there's a lot more noise going on, but I can definitely tell where the attack is coming from and how far away it is better on the MixAmp than the X7.
Having DD re-enabled seems to have improved things on the X7 over simply using SBX, but it's still clearer on the 5.8. I've also tested in a number of other games such as
Destiny,
Titanfall,
CoD and
Battlefield and the 5.8 comes out on top for positional cues. It also tosses more bass, which I like, with the X7 sounding wider yet flatter.
In practical gaming terms, we're talking bee's dick territory - if you own a MixAmp and decent low-impedence headphones, the step up to the X7 isn't worth the outlay, unless you're buying it for other reasons like multiple audio sources, and / or to hook up 5.1 speakers. It's definitely superior to Astro A50s, but for the average punter, the difference is likely far outweighed by the cost.
I'll persist with the X7 regardless, given a wired, battery-less, desktop setup is more suited to my needs. In addition to 5 consoles (HDMI > Yamaha receiver > Bravia > Optical > X7), the X7 handles my PC, Mac and Bravia audio and ties in neatly with Logitech Z5500 speakers and kicks the soundscape into the stratosphere. Connecting anything direct to the Z5500s sounds flat and lifeless by comparison, nor did it every really sound like a rich 5.1 mix when connected to a Creative X-Fi Fatal1ty on PC.
In summary, as an all-in-one solution, the X7 is great...as long as it's working properly! When it doesn't, things can go pear-shaped very quickly, with seemingly no rhyme nor reason. If you can't trust the product you're using to do the job you've paid for it to do, it makes it very easy to migrate to the competition.