This article is from the Ambisonic Surround Sound FAQ, by Martin Leese with numerous contributions by others.
To produce a sound from the direction of a speaker requires only
channel separation. To produce phantom sound images between speakers
requires a mixing style. In stereo, the most popular mixing style is
"pair-wise" mixing.
Pair-wise mixing is also called "pan-potting", "amplitude mixing" and
"intensity stereophony". It mixes signals into the feeds for a pair of
speakers to create the illusion that a sound is coming from a point
somewhere between the speakers. During mixing, the apparent location
of each sound is determined only by the relative amplitude of that
sound in the two speakers. Almost all stereo recordings are mixed
using the pair-wise mixing style.
The ear/brain localises sounds using phase differences between the
ears as well as amplitude differences. (Phase is used to localise
sounds with frequencies between 150 Hz and 1.5 kHz, amplitude for
frequencies between 300 Hz and 5 kHz, and other cues for frequencies
above 2.5 kHz. Note that the three frequency ranges overlap.)
Fortunately, when a pair of speakers are in front of the listener and
separated by 60 degrees or less, because each ear hears both speakers,
low-frequency amplitude differences between the speakers are converted
to phase differences between the ears. For most people the pair-wise
mixing style works well in stereo.
Unfortunately, pair-wise mixing works poorly when the speakers are to
the rear of the listener and not-at-all when they are to one
side. (See the Gerzon 1985 or the Fellgett 1981 references. Better
still, try it yourself!) This means that any surround sound system
that relies on pair-wise mixing between adjacent speakers must
fail. This is as true for the 5.1 discrete channel systems of today as
it was true for the quadraphonic systems of yesterday. Such absolute
statements can be made because the way that the ear/brain localises
sound has not changed.
Ambisonics is completely unconnected with pair-wise mixing and does
not suffer from its surround sound limitations. With the Ambisonic
mixing style, sounds can originate from any direction, either
360-degree horizontal or periphonic (full-sphere).
 
Continue to: