The human brain distinguishes sound direction from 2 factors:
1. Sound latency - meaning the difference in time that the sound arrives in one ear vs the other ear
2. Sound volume - the difference between how loud the sound is in each ear.
This would be true if your ears were just holes in the side of your head, but if you cut off someone's ears so this is true, then they will have really bad hearing. The shape of the ear itself is critical, as it funnels in sounds and also changes them depending on their origin. The HRTF is mainly about the geometry of your inner and outer ear.
Basically, this means that any headphones claiming to be 7.1 or 5.1 that have multiple speakers in them are really just a marketing ploy, since I doubt they give any advantage over regular stereo.
No, unless you've had a HRTF custom-made for your own ears (which is possible to calibrate, but very time-consuming), and a fancy driver that can accept this HRTF, then multi-speaker headphones are the next-best thing (actually, a multi-speaker headphone combined with a user-calibrated HRTF would probably be the best thing). As well as software processing to add origin-related hints (volume, latency, etc), they also allow your ear to do what it does in the real world, and change the incoming sound itself depending on the direction it came from, in the exact way that your brain has calibrated itself for over a lifetime of hearing things.
But most importantly - Why are not more manufacturers of portable music players (I'm looking at you Apple and Microsoft) not putting this feature in their devices!?
What's the point? Yeah, you can convert a stereo signal so that it sounds like it's coming out of speakers that are 5 foot apart, 10 feet in front of you... but why? I'm happy to hear my stereo music as if it's inside my skull, rather than as if it's coming from speakers in front of me. I'm also happy to hear it from actual speakers that are actually in front of me
Now for games and virtual 3D worlds, surround sound is actually important, so emulating surround sound on cheap stereo headphones with advanced HRTFs -- that is a good idea.