As for the Cowon EQ, I would call it a hybrid EQ, as you get 5 bands, with 4 frequency choices per band, plus narrow, normal, and wide bandwidth settings. Not to mention their awesome BBE+ enhancements. My Cowon S9 has made me a believer in EQ.
Sounds great with IE8s - that's a match made in heaven.
But as to the EQ, I imagine choosing a frequency and wide bandwidth would make a gentle curve up/down towards the frequency you select, more like a graphic EQ type enhancement, like "more bass".
On the other hand, when you pick a frequency and choose narrow bandwidth, you can pretty precisely pinpoint "problem frequencies" in your headphones and balance them out. Really helpful, as everyone has different tastes in sound. I want to experiment with headroom graphs and see if I can balance out treble spikes, sounds like fun to me!
I think the S9 is the best investment in equipment I've ever made. I'll never need to buy an amp to color the sound to my preference, or be dissatisfied with headphones because of their frequency response. In fact, I want to keep my system basic - no amps, no cables, just S9 - Headphones. I'm about to buy the DT990 32 ohm for just this reason, in order to reach total immersion in trance music. Paconavarro's excellent review has been a big factor in this decision, so thank you my amigo. I'll post results or something when I save up enough money.