Hmmm.. it still sounds like it wasn't properly configured. Or perhaps the effect doesn't work for everyone?
With my setup I can position sounds around me despite only using stereo headphones. The effect is not as strong as using speakers, but there's definitely a difference between between "in front" and "behind".
It was setup correctly. Home theatre in BF3, headphone in the creative panel and windows left un-touched with 5.1. Unfortunately it didn't help, it sounded just like my 5.1 setup when I match the front and rear speakers, a pseudo surround sound. The change to the 5.1 headphones was basically getting what I have with the 5.1 speakers but without annoying the other half. So it was the only way forward for me. I was using the stereo headphones a lot and it was just annoying when I could hear something and kept having to spin around just to try and spot it. Now I can pin point it perfectly, all I changed was the creative control panel setting back to 5.1 as it takes a feed from each channel.