You're talking S/PDIF with Dolby Digital Live or DTS Connect, right? The Titanium HD only outputs two channels in analog...
(Fortunately, as someone who only uses headphones, that's all I need.)
Which X-Fi, exactly? Titanium HD owners in general seem to be pleased with theirs, with no complaints of driver problems or anything that doesn't have to do with analog output above stereo. (At least under Windows. If for whatever reason you want to dabble in Linux with a Titanium HD...don't. You're in for a headache just trying to get it to work.)
Based on the specs, particularly the SNR of the DACs and ADCs within the Sound Core3D upon which the Recon3D cards are based, they're still below the X-Fi Titanium HD in pure sound fidelity, let alone the Xonar Essence ST(X). I think they're meant to replace the X-Fi Titanium (non-HD) line.
As for drivers...those might turn out for the better, or for the worse. Too early to tell right now.