Of course its a lot more complex than just a slight delay in one channel. I don't know the details, but it was once explained to me by a sound engineer at Universal Studios where I used to work (at the IT department).
http://en.wikipedia.org/wiki/Phase_(waves)
The phase shift is the difference between wave A and B. For a simple wave, lets say 120hz, if the frequency of either wave would be slightly off they will move in and out of phase and meet in the middle. This creates sort of a hollow effect, kinda spacey alien, sorta, weird, kinda effect
hehehe.
I believe he said this technique was used in combination with virtual sound imaging, also called crosstalk, to create a 3d soundstage. I quicly found this
http://www.isvr.soton.ac.uk/FDAG/VAP/index.htm.
The best example I know of is a CD is by Roger Waters, Amused To Death produced at Q-Sound studios. With a proper setup, this CD will completely surround the listener, including above, below and behind the listener. Really weird and very cool. I always use that CD as a reference for setting up speakers at peoples' homes. Not that I do that very often, but when I do, I make sure I use that CD to determine speaker placement. Once I had to really convince a visitor I wasn't using my surround speakers. He really thought I was fooling him