[FernetMenta]

Agreed stereo upmix is not good for video content for the reason you state, but I like it for music as it gives a concert feel of being surrounded by music.

My main AVR has an all channel stereo mode which I always turn on for music, my 13 year old AVR in the 2nd room setup doesn't have that DSP mode so it would be nice to have something in XBMC. In fact going back to Xbox XBMP/XBMC there was a music only "Output stereo to all channels" mode which I used until about 3 years ago when the Xbox finally got retired from the house.

A bit of background info on the old setting:

http://forum.xbmc.org/showthread.php?tid=33036
http://forum.xbmc.org/showthread.php?tid=59146

So we make this a setting for music and mix it like Jonathan has suggested?
Thus, a normal 2 channel piece of music gets the Left and Right channels duplicated into the Back left + Back right, and mixed into the Center + LFE.