I happen to own both the PC- and the xbox-version of KotOR, and while the graphics are considerably better on the PC, it's almost fubar compared to the xbox. When playing on the xbox, (connected to my reciever with dolby digital decoding) the panning between the speakers is what it should be. Blaster shots sounds like they're come from the back of my head straight into the tv, the wind blows from the left to the right and when people are walking behind me, the sounds of footsteps can be heard from the back, the audio experience is nearly the same quality of a dvd-movie.
On the PC, on the other hand, i experience nothing like that, no echoes, the reverb is almost non-existant, and the panning is only working through the front speakers, while the rear speakers only seem to be mirroring the front speakers. One should notice that i also have a 5.1 set of speakers(with dolby digital decoding) connected through the S/PDIF to my nForce2 motherboard with dolby digital encoding enabled. The results are the same no matter what driver i use.
To sum it all up, i hope that Obsidian takes this in considerment to the PC users without being forced to buy a Creative soundcard.