In game sound settings
Try messing with the "3D sound" setting. Try turning it off and on to see which setting sounds better.
More info is needed. Which OS are you using? Do you have Dolby Digital Live and/or DTS Connect features on your sound card?
If you're using Vista or Windows 7 and have a Realtek sound device (such as onboard HD audio) their utility to enable surround sound in games is called 3D SoundBack. The problem is that most games use XP's Directsound for surround sound while Vista and Win 7 no longer support it. 3D SoundBack (like Creative's ALchemy) sends the Directsound output of your games thru a wrapper into the new sound interface. It sounds to me like this is your problem, and installing the utility should solve it.
If you don't have DDL or DTS-C you also won't get 5.1 sound thru your sound card's digital out. This is because the surround sound provided by games can only be sent thru the digital out as stereo PCM. If you have DDL or DTS-C this function provides 5.1 compressed audio (in either AC3 or DTS format, respectively) over the digital out on the fly. While this will indeed give you 5.1 sound in your games, it can result in a noticeable drop in performance and/or sound quality.
The performance/compatible setting directs the game's sound module either to use or not use any available hardware audio acceleration. Both settings should sound the same, but performance will in theory use less CPU power than compatible. Performance is the preferred setting.
I finally have configured suround sound on my system by connecting the (fiber) optical port on mobo sound card to my 5.1 Dolby Digital receiver. When i'm in-game, the center channel is dramatically quieter than the side and rear channels. I tried playing with the in-game settings first and didn't notice a difference between "compatibility" and "performance". What is the difference between the two and what should I be using?
Also, I have monkeyed with the channel levels both in my sound card settings and my Onkyo receiver. Right now, i basically have to slam the rear and side channels at -10 level, and jack my center channel at +8 level. I must be missing something in settings, everything else being output through my computer/receiver in 5.1 DD is normal at 0 Level channels.
Any help is appreciated.