I think the game has some sort of 3D processing going on in stereo mode because I am able to place sound behind me.
This is something I have noticed is pretty standard for the current generation of console games. With a pair of stereo headphones sound that come from behind the camera sound like they are coming from behind you. Its pretty sweet. I cant really comment on PC games. I just installed a new Radeon HD 6950 a couple of days ago. Before that I wasn't able to play any recent-ish games, so im not sure how common it is.
I think most console games have this because it's a standard feature of the XAudio toolset, which is used for many PC games these days in addition to Xbox 360 games. FMOD might also have something similar, which again is quite common, and Miles too, which The Witcher uses. The one downside I'd say is that the effect isn't nearly as effective as it "could" be in these games, and most games don't offer a proper headphone mode for true HRTF positioning, but rather offering some very weak positional processing that operates in 2.1 mode. It's definitely a step up from older games where everything sounded like it was "in your head" with poor spatial imaging, but again, I've never heard anything that sounds as good as native OpenAL games like Unreal Tournament 3 with CMSS-3D turned on.