My guess is that it is a matrixed surround sound because it seems to interact with the Dolby Pro Logic II / Dolby Surround decoder on my AVR. There is very little documentation on StereoEnhance and playing with the sliders has proved interesting but not informative. Does anyone have any experience with it? Is it like QSound stereo widening?
Changing pan pullout from the default 1.0 to 0.0 creates a mono downmix, though I found that it actually removed audio information in some songs, which I found very strange.