The Gadget: Turtle Beach's Earforce X4. It's a wireless surround sound headset that can also plug into an Xbox 360 controller for full Live chatting.
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The Price: US$200
The verdict: If you've got an extra US$200 and play Xbox 360 a lot, buy 'em.
It should be noted that these "surround sound" headphones are really transposing a 5.1 channel signal into two stereo speakers, but the results are excellent all the same. In Call of Duty 4, I could track a helicopter's proximity to me perfectly (with exception of just behind my head). And in Project Gotham Racing 4, cars whizzed by ears with aggressive speed.
As for the chatting, it's a complete pleasure in the X4s. Not only do both sides of the conversation benefit from improved audio clarity, but you hear your own voice mixed in with the game audio. This audio loop is to help keep you from shouting, and I think it works in practice. Plus, the mic's wire is supported by a pliable but durable metal skin—it feels 100x better than the stock 360 headset mic, like production-level gear.
Honestly, the sound quality isn't as good as you might find in dedicated surround sound headphones for the price. (My experience with the slightly more expensive Sony DS6000 blew these away.) And we'd really like the headphones to be rechargeable (an industry standard). But given that the sound is still quite decent, I never had a hiccup in the IR signal over hours of play, the ear cups are extremely comfortable and it's given me a manner to chat and use headphone surround sound (this is a VERY niche market of products), I'm quite pleased with the Earforce X4s and strongly recommend them to 360 gamers who need to keep the gunfire down while babies are sleeping, etc.