An Australian company, which was commercialised from research from the Auditory Neroscience Lab at The University of Sydney, has come up with an amazing system for surround sound in headphones.
We actually use the shape of our ears and how they affect the sounds that reach us to determine the angle of the sound we can hear. Even though everyone's ears are subtly different, MyEars has come up with a way of altering the sound sent to us via a set of headphones to give quite good positional audio.
I tried it with my high quality Shure in-ear headphones and after spending a while in the calibration tool (and getting confused by it a bit), I managed to get a setup that gave me nearly perfect positioning in the 180 degrees around the back of my head. I still wasn't quite sure about in front of me . . . those sounds still sounded a bit like they were "inside" my head. I'm not sure if that was a calibration error on my part and I need to try that again, but even if it wasn't, the technology is showing an amazing capability to position audio sources using only headphones.
Check out their website at http://www.myears.net.au/ for more info. It includes a two week trial that you can check out without paying.