Why is 2 Channel better than multi-channel?

Technically, it's not. A good multichannel system can provide far more spatial information than any 2-channel rig. The catch is the word, "good." 5.1 is a rather poor compromise essentially imposed by the movie industry. Then there are the cost and set-up challenges. I'm sticking to 2-channel (even for video!), but I won't claim it's inherently better.

Have you ever noticed that it's often easier to place instruments by ear at home than it is in a concert hall? There's so much reverberant energy in a "real space" that a two-channel rig in a home environment can't begin to capture. (Neither can a 5-channel rig, in my opinion.) In fact, the clear spatial cues in a stereo recording partially make up for the fact that you don't have the visual cues you do in a concert hall. And yes, Hindemith, I suspect you'd give up some of those spatial cues (which help you distinguish instruments) in a multichannel application. What you get in return is something closer to the concert hall experience. So there is a trade-off there, and you have to decide what you want.

Gboren: I think you don't understand the *possibilities* of 5.1. I've heard gimmicky recordings that put me in the middle of a barbershop quartet, and they sounded, well, gimmicky. What good multichannel should do is recreate the reverberant energy of a concert space. What should come from your surround speakers isn't instruments, but the reflections from the walls of the concert hall or whatever. Done right, it should sound like you're sitting in the middle of the hall, not in the middle of the orchestra. But not every recording engineer is equally adept at doing that. (Note the vast understatement there.)