Correct me if wrong, but isn't sound card surround just simulated? True surround has to be mixed at the source right? You can't take a stereo output and turn it into true surround.
First of all it's not some virtual surround, it's binaural sound simulation.
Whole virtual surround is just bad marketroid term.
And that's why Windows playback settings have to be configured for 5.1/7.1 speaker configuration, for game to produce also front-rear sound information besides left-right information.
Despite of marketing hype 7.1 just doesn't give any new information over 5.1.
Though best would be DirectSound like system, in which sound card can access actual 3D sound data of game for calculating output channels from that.
(sound source locations, samples and acoustical model of environment)
Microsoft completely killed PC game sound development by killing sound processing hardware acceleration with Vista.
Because sound processing not happening in real time has lot more serious consequencies than some frame rate variation in graphics.
(think about crackling of sound and such transients what happen when DPC latency is bad)
Binaural sound is just sucker for sound stage and has specific lot harsher requirements for headphones than any stereo music.
Which can actually truly benefit from smaller sound stage.
That's why some famous for music headphones, like Sennheiser HD650, would be just average good for binaural sound.
And closed design is especially bad for binaural sound, because of sound stage problems from its acoustical behaviour/physics.
Naturally most gaming trinket headphones as closed cans are at big disadvantage to start with, even without low bling bling trinket quality.
But with good sound quality open headphones with big airy sound stage besides 360 directionality you also have good sense of distance.
While that higher than default 100% settings isn't best (still lot better than Dolby Headphone) first minute of this works as excellent headphone test for sound stage:
This one is lot longer gameplay:
Just try those with bass neutral AKG K701/702 or below neutral bass ATH-AD700x which all have huge binaural sound stage.
(K712 has basically same sound stage, but above neutral fun bass just makes details not so obvious)
Of course shape and size of head and ears affects to what kind differences brain has learned to use for processing sound direction.
So for people with "non-standard head" immersion will always be worser, no matter the headphones or algorithm.