Maybe something in the Xear3D settings is causing it. (Btw I turned off Azalia audio in BIOS and some of the unavailable playback devices are no longer showing - which is good. But it still does the distort effect, so...it's not good)
So as you can see on this clip - http://www.justin.tv/madoverdose/b/283144743
it works fine
Then I tried streaming with a friend watching and the song I played sounded really static like. It's so frustrating. I'll do say 3 tests and it will work flawlessly, then the fourth time (or even fifth) it will just randomly decide to not work again.