in a nutshell, it does what earlier surround processors do with music and movies, i.e., provide a plausible surround sound environment using just two original channels via extraction and logic steering/processing of matrixed or random out-of-phase elements inherent in most existing stereo recordings. IOW it extracts said stereo surround/difference signal and sends it to 2 or more rear speakers, plus it derives via extraction of L+R and some logic steering, a center channel between the left and right stereo speakers [useful for filling in the hole in the middle if you have them wider than the recommended 60-80 degrees apart] as well as supply a filtered 120 cycle subwoofer output. it by all accounts does these tasks better than dolby pro logic IIx and Neo: 6 as well as earlier generations of matrix-based surround decoders. and it does this with the universe of existing stereo recordings out there. granted, it is not the same as dolby digital or other true digital surround formats that give you discrete channels from the git-go, but it supplies a plausible imitation of that result just the same, with any stereo record you got. a while ago they were selling scratch-and-dent models for a hundred bucks cheaper. watch out for those rare sales. i know i will eventually go into debt to get one of these babies just as soon as they become available again [artificial scarcity going on here?].