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A lot is being made of the term "psycho-acoustic simulation", but it's not something new. It's the technique by which lossy compression algorithms can throw away data while still making it sound to the listener as if they hadn't. It can also be applied to the variations that allow two headphone speakers to simulate surround sound, by using subtle auditory cues that trick the listener into thinking that a sound is coming from behind or in front of him, rather than from the sides.
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