Okay, first, you DO need a true audio chip. People keep getting confused because it's audio processing but you can use any audio card after that. A sound card is primarily for pushing the signal to speakers, Trueaudio is doing processing on the sound before it goes to the sound card. There isn't sound output on the gpu card, the data goes to the gpu, is processed, they handed to whatever you normally have to output it.
There is no reason that demo needs headphones, stereo speakers or 5.1 speakers set to stereo should work fine. You should make sure in general that the processing from any soundcard you have is turned off. YOu don't want to reprocess the audio.
It does make a difference, but it's not massive. With the lightning bolt although the bolt was doing a circle but at an angle so it was going down to the right and up to the left, with normal sound it was just moving around me left to right, and aside from the exact point the sound switched from left to right speaker there was very little difference while on either speaker. With trueaudio it certainly made the up and down nature of the sound VERY obvious, and the location while it was on the left or right was far more accurate. The latter was true of the fire, the arrows though, was a poor demo really. They should have showed a demo of two guys firing either side of you, THEN two guys firing but one was below you to the left and one was above to the right.
The arrow wasn't as impressive, but the first two were. Add in more voices and more sounds and it will be more obvious most likely. Shame that for me LIchdom looks a bit poo. Games which base their premise around, "you can make eleventy billion different versions of spells", usually fall flat on their face when there are 5 awesome ones and eleventy billion - 5 crap ones no one uses. Kinda like borderlands and it's infinite gun system, yeah, but you'll only use 5 guns in the game because you'll pick up and awesome one now and then and find everything else you pick up is rubbish in comparison for another 1/4 of the game.
ANyway, "normal" 5.1 surround, if you take that initial bolt or fire, would just be split into smaller arcs which does help, but it doesn't in any way add that ability to determine height, nor the reverb. That fire would sound different if it were a campfire outside in the open and inside in a stove with a roof. Normal audio can't add room detail, TrueAudio will.