It's just stereo audio, only the recording source is inside an artificial ear. The shape of the outside of the human ear aids in the brains ability to determine the direction of sound The first thing most people do when trying to orient on the source of a sound is move their head around a bit, gives the brain a bit of extra phase shift to work with. I'm sure the details are incredibly complex.
If you really want the full effect try a 190khz sample rate and put the speakers inside your own ears like hearing aids.
Edit: The main reason this is only a 'fad' or most of what you'll find is just short clips is that although it's still debated, higher than 44.1khz sampling rates are required to really capture a high degree of positional data from audio because allthough people can't hear frequency distortion above 20khz they can hear binaural phase distortion from digital aliasing effects. That and people can get 'simulation sickness' the way some people get ill by the few ms's of delay a full visual headsets can with stereo vision the same thing can happen with audio, when you turn your head there is no phase shift in the audio and it can cause pretty bad disorientation unless you're listening to it absolutly still in the dark. Try listening to it while walking down the street and looking around, you'll probably be highly distracted if not falling down =) If you're looking up you might end up hearing an airplane sound coming from 30 feet bellow ground level.