To Dawgbyte, what type of shows have you attended that don't allow you to put the sound with the artist? I'll give you that most "electric" live shows don't have such queues since everything is amped up and pumped out via some massive speaker system.
But when the recording is of a small quartet, for example a bass, drum, piano and vocalist, positioned on a stage, and a couple of microphones are set up fairly nearby, the arrangement of artists will come through the recording due to the slightly different arrival times of sound at the mic diaphragms. If you were standing near the center of the performance with the mics, you'd be able to close your eyes and place the drummer, bass player, piano and singer.
The studio created effects use the two channels and phase delay to make our brains think a sound is coming from specific locations. If you can close your eyes an easily assign locations to certain sounds, then your system has produced the illusion very well, especially if the sounds you're pointing to have no relation to the speakers.