Ok, I'm at a loss then. From what I've found online, the headset should work fine in stereo mode as long as the controller isn't set to 7.1 mode. It should work fine in XP, and doesn't require any drivers either. I'm at a loss as to what could be causing this issue. The only thing I can think of to do is to double-check that everything is firmly plugged in and that they're in the correct place, and to try pressing the 7.1 button and see if it turns any colors other than green and red (if so, see what happens when it's the other colors, and if not then leave it on red).