I just found this while searching for information about Deus Ex and positional 3D audio. This is really cool! But I think I found a bug - I don't know if it's my system/configuration or if it's this software. In Deus Ex, if I am looking slightly up, then player-generated sounds come from behind me instead of in front of me. This applies to footsteps, pistols firing, and the sound of equipping the baton. So for instance, if I am running in a straight line while looking down, I'll hear my footsteps in front of me. But if I gradually look up while running, the sound will at some point very suddenly switch to behind me.
Sorry for not replying sooner; I hadn't checked in for awhile.
I spent some time this weekend looking into the behavior you describe. The good
news is that the same thing happens on my machine, so it's not anything wrong with your system/configuration. The bad
news is that from what I can tell this is actually how Deus Ex was programmed as opposed to a bug in IndirectSound.
I started by trying to isolate the footsteps and then figuring out why they change between front and rear. This is pretty difficult to do because so many sounds are playing and I don't have access to the Deus Ex source code, but I am reasonably confident that I identified the proper sounds and that they do, in fact, change position so that sometimes they are in front of you and sometimes behind, based on if you're looking up or down.
I also ran Deus Ex in Windows XP using my Creative X-Fi Elite Pro, which is what I usually use as my "gold standard", and the same effect can be heard there although it's not as offensive as when using IndirectSound. The discrepancy is because IndirectSound uses Microsoft's implementation of positional 3D sound, which is much more discrete than Creative's (in other words, as a sound moves between two speakers it will tend to "pop" from one to the other using Microsoft's implementation, whereas it will tend to play in both and thus blend better in Creative's implementation). I believe that Creative probably plays sound in more than one speaker when a sound gets close to the listener's head, whereas Microsoft probably chooses whichever single speaker is best. (I should refresh my memory and verify this for sure, but I didn't have time this weekend.)
I've thought for a long time that it would be fun to try and mimic what Creative does because I think it sounds better, but that means having to implement the 3D positional algorithms from scratch (and also having to rely on my subjective opinion of whether it sounds correct or not), and so I haven't tackled it yet. Unfortunately that means that there's probably not anything that I can do to make footsteps and other player-generated audio sound any better at the moment since it's the way that the game is programmed. Sorry :(