I'm not entirely certain of how the kX drivers work, but my impression is that he's trying to have the equivalent of 5.1 surround through headphones via HRTF, particularly in games.
While it's true that you want to use the Creative control panel with Creative-based sound cards, the issue here is that newer games tend to use APIs like XAudio2 that pre-mix the sound according to the Windows sound control panel settings. They'll dumb it down to stereo if the Windows setting isn't 5.1 or 7.1. They don't look at the Creative sound setting since game developers nowadays think everyone just uses onboard audio codecs and speaker setups. In my experience, this doesn't seem to hinder proper stereo playback from stereo sources at all if the Creative control panel is set to Headphones; stereo music tracks sound like they normally would out of headphones (right beside me instead of out in front), and the surround channels seem to be downmixed into stereo automatically regardless of whether CMSS-3D Headphone is on or off (although with it off, the imaging will be significantly different, as if side and rear left/right are coming from the same direction as front left/right). This applies regardless of which mode the X-Fi is currently in, so I generally leave the Windows control panel at 7.1 and don't touch it after that.
In short, the ideal setup is apparently 7.1 in the Windows sound control panel, but Headphones in the X-Fi control panel. This works because (at least on the X-Fi Prelude; I don't expect other X-Fi drivers to act differently) changing the X-Fi control panel's speaker/headphone configuration doesn't change the Windows sound settings.
If the Titanium HD provides those options, that's great! It may not output discrete 5.1 or 7.1, but at least it'll give CMSS-3D Headphone additional positioning information to work with in those newer games designed to cater only to speaker users sound-wise.