Speakers play down till ?hz before imaging suffers

What cut off frequency should be used before sense of direction or sound stage suffer.
I remember reading or hearing somewhere that down till 40 hz our ears are able to sense placement, does that mean that the main speakers should play down till 40hz and the subs take over from there on down? Does this improve intermodular distortion? Is this (40 hz) correct ?
I am searching for a crossover and was curious if this should be used to determine where to crossover or other parameters should be used. Or would doing listening tests be better?
Interesting questions. I was under the impression that it's a little bit higher than 40hz before we perceive directionality, but not by too much. I don't know the exact figure though, or even if it is an exact figure and not a function of the listener's aural acuity.

Keep in mind that subwoofers are not only used to reproduce frequencies below the main speakers. Sometimes they are used to augment frequencies the main speakers already produce, but at too low a volume. That's why some speaker manufacturers recommend that their speakers run full range even with a sub. So you may not want to have the sub take over completely at a specific frequency.

If you use a steep roll-off between the main speakers and the sub, I would expect it to remove some intermodulation distortion. But the non-overlap in the crossover region may make integration more difficult. In other words, you may more readily perceive the differences between the characteristics of the main speakers and the sub around the crossover region where there is no overlap. You may also get a bit of a suckout or a notch effect at the crossover point. So maybe it improves one thing but creates another problem in its place.

I don't know. These are just speculations. I think your idea about the listening tests is best.
At one time I read several Audio Engineering Society papers on the subject of detection of low frequency sources, and came away with the understanding that a crossover frequency of 80 Hz was acceptable as long as the low-pass filter's slope was steep enough. Tones below 80 Hz could not be localized by ear, but if the crossover wasn't steep enough then sufficient lower midrange energy would leak through to give away the sub's location. Subwoofer systems that meet the 80 Hz/steep slope (4th order) criteria can be placed pretty much anywhere in the room.

If the crossover has to be above 80 Hz and/or is not very steep, then it's best to keep the sub(s) near the main speakers and probably fairly symmetrical. That being said, I have used a satellite/sub system that had a 150 Hz crossover with a relatively shallow slope (12 dB per octave) and I could not detect the sub's location when it was off-center to the left or right of the centerline, as long as it was in between the satellites.

Once you start getting below 100Hz localization of the sound becomes difficult/impossible. Genereally speaking, find out what the 3db down point is for your main speakers and setup your sub to come in at slightly above that freq.

This is a "ballpark" figure and is subject to change based upon your speakers, room, etc...

I guess it could vary somewhat for each individual, but I thought sound localization became easier above 120Hz. I'm sure that was considered when THX was deciding on their standard of 80Hz.