The first GenAudio demo at GPU 14 was in 7.1 multi channel and they specifically said it supports mappings of input to output channels. I think it's likely "most impressive" when using headphones/2 channel output as you are getting very close to multi-channel output with that.
I would hope that (like some of the other 3D sound standards) the more output channels you have the better it works for more seating positions and can provide even more accurate positioning. It would be nice if some of the attendees at the conference could comment on how the 7.1 demo sounded.
As a side note, I also note that some folks seem to be confused (if that's the right word) between sounds source numbers and output channels. i.e. the 8 or 16 channels in HDMI, this is just the number of supported speakers, you can still have an infinite (if the system supports it) number of sounds being sent via those 8 (or more) speakers. The way GenAudio works, we should actually need less speakers "in room".
The number of speakers should really be dictated by available room space.
What I would be interested in finding out is if GenAudio's methods are capable of sending there "special filters encoded in the output steam" in such a way that e.g. height effects could work with things like PLIIz and Yamaha presence to also utilise actual height speakers to further position sounds. If not, there is no point in getting any output system with more channels than those discretely encoded and for most rooms we can probably stop at 7.x (.4 ideally) ... which would actually be a good thing from a cost perspective.
Maybe these are some of the things they are thinking about for GenAudio 2.0.
You hit on all the points I thought about when I heard the conference, and I couldn't agree more with your opinions.
Virtual surround shouldn't be a replacement for discrete channels, even though it was pitched in that manner at the demo (where they only enabled two channels and encouraged the audience to compare it to the 7.1 channel demo). I can see their argument for appealing to the masses who, according to one of the speakers at the conference, "can't even get their 5.1 systems set up right." I don't use headphones, and from my experiences with speakers and games it's just not possible to ever create a virtual surround mix that will sound as good as having discrete speaker channels.
Rooms have unique acoustic signatures and virtual surround mixes never account for the acoustic signature of the room in which they are being played. So while my audio receiver can analyze the room characteristics and adjust frequency response of the speakers to cancel out the room's properties, you can't do that precisely with virtual surround because it assumes you have a specific room shape and frequency response. The only good use I see for virtual surround is in headphones because they do not have to deal with echoes and reverberations of the room. I always see adding more speakers to a room as the better option than going with virtual surround, but I can understand that most rooms don't have the space for a lot of speaker channels so virtual surround can be better than nothing.
On a side note I know I'm in an extreme minority but I do have a 9.1 channel home theater. For those who are not familiar, as of right now there is no native way to use the height channels; the only way to use them is through matrixed 7.1 mixes like Dolby PLIIz and reprocessing of other formats. I have tested the system using 7.1 audio sources with and without the height channels enabled (with audio being split from the main stream using Dolby PLIIz, Audyssey DSX, and DTS Neo:X).
The height channel effect is very subtle in most cases, and I could completely understand if someone tried the comparison to virtual surround and couldn't tell any difference at all. The virtual surround demos do emulate the experience I have had with height channels very well, but I don't know if that's because these height effects are very subtle or if the current lack of discrete data for the height channels reduces their effectiveness. If there was a way to get discrete channel information to the height channels then they would sound a lot better.
I have played a lot of games using the 9.1 system, and the best one I've heard so far was Heavy Rain for the PS3. You almost felt like you needed an umbrella in some of the scenes in that game. Sports games are also good since you really get the effect of a crowd cheering in a stadium and you can hear people screaming from the cheap seats.
It doesn't even give me that option. I can get my TV and AVR detected as HDMI Audio devices, but they only show stereo as a config option.
It's not like HDMI audio on GPUs not working is anything new, I've seen plenty of people say the same. One here that DID try using it for games even said he prefers his sound card's DTS, because the multi channel PCM messed up the channel positioning in games.
If you only see stereo on the HDMI output, then that means that the only LPCM (uncompressed) audio stream your device supports is two channel. This does not mean it does not support compressed multi channel formats like Dolby Digital or DTS, just that it does not support uncompressed 5.1 or 7.1 audio. If you have a receiver that has 5.1 or 7.1 channels and only shows up as stereo, then you need to use Dolby Digital Live or DTS connect to compress the audio into a compressed multi-channel format before your receiver can decode it. I've never seen that software used over HDMI though, only with certain sound cards with the right licensing and TOSLINK or digital coax outputs.
Also, if the multi-channel LPCM is messed up in games, I highly doubt it's the video card's fault. Either the receiver has the speakers wired incorrectly or the game is outputting audio for a different number of speakers. Most games don't detect the correct number of speakers automatically and if you don't manually set it the game sounds awful.
From my experience in troubleshooting problems with computer HDMI audio output, almost always the cause is what I described two paragraphs above. The problem lies in the receiver or end device not supporting multi-channel LPCM rather than with the video card.