it's environmental audio enhancement. it's not just a simple surround sound implementation. it's precise sound placement that has made gaming more immersive(what's creeping behind u?), more enjoyable(booming soundtrack behind u), helpful sound cue(footsteps on your left, someone's coming!), more believable(FPS games such as medal of honour).
i'm sure u have watched movies from tv's which the sound from the tv itself is so different from home theatre system. it's a crude example but that's the kind of difference between straight stereo widening @ pseudo-surround & EAX(or dolby digital or DTS for movies).
not only that, EAX makes the sound more realistic such as when u walk on sandy surface or tiled floor or in a cave where sound echoes, u can tell the difference. & also muddled sound like when u hear conversations from the other side of a thin wall. occlusion, they call it. Try out this
link . hope it helps in explanation. <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
for more specifics,
http://eax.creative.com/advanceeax.asp