In a traditional stereo recording, a virtual sound stage is created by a number of techniques. Panning audio left and right is the most obvious way to place sounds on the stage. Adjusting levels and/or adding reverb will allow the representation of depth in the virtual stereo stage. You can imagine the virtual stage as an almost triangular shape with sounds up front of the stage capable of having the most width, and the sounds at the back collapsing to the centre of the virtual stage.
Stereo audio is usually restricted to what’s in front of you. For a more immersive sound experience you can hear sounds mixed in 5.1 Surround Sound (or 7.1 or various other combinations as available). Most home theatre setups will use the 5.1 surround configuration and audio can be played through DVD-A (Previously the medium of choice of digital music curmudgeon Neil Young) or a sound system that supports AC3. Mixing for surround sound presents a myriad of additional challenges but also creative opportunities.
One other way to introduce spatialization to your audio is through Binaural recording. In its most basic form, two matched microphones are placed about 18cm apart. The microphone placement is designed to replicate human hearing, so a preferred method is to place the mics in-ear (e.g. Roland CS-10em allows you to do this). More advanced binaural recordings will use a dummy head for recording.
Human hearing uses a number of different cues to localize sound, including Inter-aural Time Difference (ITD) and Inter-Aural Level Difference (ILD) and frequency information through filtering at the pinna. To an extent ITD and ILD can be mimicked in a standard stereo recording, but capturing these cues directly allows for more detailed localization information to be recreated. Binaural audio therefore can recreate sounds to the side, or even behind the subject with great accuracy.
You can stick on a pair of headphones (binaural audio doesn’t generally translate to stereo speakers) and listen to the sample above (Wandering Through Times Square From Stanmeyer at Soundcloud) to get a feel for how it sounds. It’s worth searching soundcloud for other binaural tracks (use the field recording tag aswell for more samples like the one above). There are plenty of creative applications of binaural audio. Dylan of Fuzzy Logic has a great binaural recording of a performance recorded at the Project Arts Centre in Dublin. Check it out in the youtube clip below.