I have not heard any multi channel expansion I liked done in the digital domain. However, the McCormack MAP1 analog Multi channel preamp expands 2 channel to 5.1 in the analog domain (called Ambiance Retrieval Mode [ARM]), and I really liked it. I have since moved on for my main system, but I still have the MAP1 in my secondary system and enagage it on 80% of 2 channel sources to great effect. The same feature is implemented on the Conrad Johnson MET1 multi channel. The MAP1 sells used for less than $1,000 and in my view its a steal.
Keep in mind that in order to do the expansion in the digital domain in a processor you would either have to use a CD transport and the DACs of the processor for redbook, or digitize the analog outputs of your CD player. Both options are far from optimal.
In my estimation, you will get better results for redbook for less money by staying in the analog domain and use a MAP1. For multi channel you would get a BR player with stellar analog outs. The Pioneer BDP-09 is a very good candidate (no SACD). Of course, this setup will not give you room EQ.
Keep in mind that in order to do the expansion in the digital domain in a processor you would either have to use a CD transport and the DACs of the processor for redbook, or digitize the analog outputs of your CD player. Both options are far from optimal.
In my estimation, you will get better results for redbook for less money by staying in the analog domain and use a MAP1. For multi channel you would get a BR player with stellar analog outs. The Pioneer BDP-09 is a very good candidate (no SACD). Of course, this setup will not give you room EQ.