I think I know this...
My psych prof was talking about this the other day, but with a dog on an old beatles album.
The reason your brain knows whether something is in front of you or behind you is because of your pinnae. This is simply the fleshy outside part, what people normally identify as "the ear". You know the things that Mike Tyson likes to bite off.
Anyway, your pinnae, the way they are shaped, create different "echo" patterns depending on if the sound comes in front of you or behind you that your brain has learned to recognize.
Here's what the Beatles did (and probably what they did in that song too, but I couldn't get it to download)... They made a reconstruction of a human head with ears (pinnae, remember) and then stuck two small microphones in each ear. They then had the dog run behind the "head".
Also, I'm guessing this works better with headphones then stereo speakers.
-Sal