In case anyone is interested, I did a little research and found some good info:
"The ALC892's lack of surround-sound speaker virtualization is a definite weakness. Dolby Headphone isn't a perfect substitute for a proper 5.1-channel speaker setup, but for gaming, I much prefer it to vanilla stereo output. The two-channel speaker setup faked by the Realtek codec is an improvement over standard headphone output, too. However, it's definitely lacking next to the Dolby implementation, which feels more immersive."
"The question is not whether you need those upgrades, but if they're worth the additional expense. In the case of the $30 Xonar DG, the answer is a definitive yes. If you have halfway decent headphones or speakers, the DG offers a very real step up in sound quality for what amounts to a pittance. That's Editor's Choice material—easy."
http://techreport.com/articles.x/19997/5
Also check out this article:
http://www.codinghorror.com/blog/2011/05/who-needs-a-sound-card-anyway.html
I decided to get the ASUS Sound Card Xonar DG, which is perfect for headphone gaming, even better than the more expensive Xonar cards.