Interesting. This sounds like a great "poster child" song for encoders to strut their stuff.
I don't know which encoders give the best stereo separation, and I don't know much about how the encoders do the separation, but here's what I do know:
There is an option called "Joint Stereo" for most encoders. I have only a vague understanding of how it works. I think it conserves bits by not encoding the tracks as two separate entities, but rather devotes bits to the stereo separation only as needed.
Did you ever try encoding with Joint Stereo turned off? This would require a higer "base" bitrate to acheive the same quality level as an equivalent Joint Stereo file (nearly double, I'd guess), but the tracks would be two separate entities.
Now you've got me wondering about this. My car's stereo image is awful, and I always assumed it was just because of the way my speakers were set up (nothing in the dash yet). Maybe it's just that, or maybe the stereo image isn't as good with MP3s. I don't know. Maybe I won't know for sure until WAV support is available for the Empeg?
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Tony Fabris