I've looked closely at and listened carefully to recordings made with it's big brother. Quite impressive.
Yes the little one records a surround encoded signal into two channels. You need a decoder to get back to 5.1. Some separation is lost in the matrix encoding process compared to recording discrete channels.
Also be aware that recording surround requires careful microphone placement if you want more than just a gimmicky effect that will soon become annoying. Just trying to get a stereo mic in the right place is quite a challenge, one that I've far from mastered.
Has anyone found a software decoder to actually get the individual tracks out of these? I have not - the only way I've found to get the surround data is to play it through a hardware decoder. Not very convenient at all.
The Zoom H2 4 track recorder works reasonably well if you are careful about placement and the environment has good sound. Worthless in a boomy room.
Minnetonka Audio Software announced a new agreement with Holophone of Toronto to include SurCode for Dolby Pro Logic II software in a new Holophone bundle.