This interview between Maximum PC and AMDs TrueAudio Design Engineer Carl Wakeland seems to throw some light on it:
MPC: One of the problems with gaming today is a lot of gamers run USB headsets. The DSP’s are external to the PC – but with TrueAudio, you’re saying you’re getting to the audio before it even gets pushed out to the audio devices? How does this work if you have an existing sound card already such as an X-Fi, Xonar or advanced onboard audio already?
AMD: AMD TrueAudio comes into the audio chain at the application level, long before sound ever reaches the user’s audio chip or audio endpoint. Whether you have integrated audio on the motherboard, a discrete sound card, or a standalone USB headset, AMD TrueAudio is already part and parcel of the audio stream that’s being fed to these devices by the game’s audio engine. That’s the beauty of operating at the level of the audio library: it’s the first stop in the audio process! And because it’s the first stop, only AMD TrueAudio is fully aware of the game’s positional and environmental data. We are alone in our ability to provide audio data that fully reflects the game’s goings on.
MPC: So a person could keep their existing discrete X-Fi/Xonar/Recon for the superior DACs/ADC, and switch off their effects to use TrueAudio but then switch them back for games that use OpenAL or don’t support TrueAudio?
AMD: That’s 100 percent correct. We designed AMD TrueAudio in the manner that we did precisely because we know users have great audio hardware with high-quality OPAMPS that they don’t want or need to forfeit. Whatever audio device(s) a user has right now, that hardware is ready to go with AMD TrueAudio.
http://pixelrant.com/2013/10/08/everything-you-wanted-to-know-about-amds-new-trueaudio-technology/