You need to set Audio Channel to 5.1 or 7.1 and then with the Analog Out on Headphone and Dolby Headphone ticked, you'll get the Virtual Surround sound. If you click the Speaker Test button (to the right of Analog Out) you can test it first with Dolby Headphone enabled and then disabled to see whether you like it. You may also want to try with the GX DSP mode disabled to see whether ArmA sounds better like that and also with the Game DSP mode turned off. Hi-Fi DSP mode is the cleanest, most effects-free but it might disable Dolby Headphone so check that with the Speaker Test before deciding whether to use it.
PCM 48Khz is probably the best choice (I can't recall exactly why but I remember reading something and setting mine to that!) SPDIF Out is only for using the digital output so you don't want to tick that.
It's not unusual to have to set mic boost on (I have to use +20db and turn the volume down a bit). If the Xonar control panel doesn't let you tweak the boost, you could look at the Windows settings (right-click on the speaker icon in the notification tray and select Recording Devices, then the mic input on the Xonar, click Properties and look under the levels tab). On the Listen tab, you can tick "Listen to this device" which will send the mic input to the headphones for testing, so that you can monitor the level without using Teamspeak.
Also, make sure that on both the Playback and Recording tabs that the Xonar is set as Default Device and Default Communication Device. You'll probably want to disable the onboard soundcard as well, which you can do by going to Device Manager (you can open it by going Start Menu - Run and typing devmgmt.msc), then under "Sound, Video and game controllers", find the onboard sound, right-click and select Disable. Later, you should probably disable it from the BIOS but I'm not sure if it really matters.
For Bandicam, all I can suggest is check under Video - Settings that you've got the Sound Device settings correct. If you still have problems, you could try these Unified drivers http://maxedtech.com/asus-xonar-unified-drivers/ but I wouldn't think that would be necessary.
EDIT: Oh, you probably want to disable SVN (Smart Volume Normalisation) as well, as that will compress the sound, eliminating much of the dynamic range (difference between quiet and loud sounds).
And I forgot to say, congratulations and enjoy your new sound
PCM 48Khz is probably the best choice (I can't recall exactly why but I remember reading something and setting mine to that!) SPDIF Out is only for using the digital output so you don't want to tick that.
It's not unusual to have to set mic boost on (I have to use +20db and turn the volume down a bit). If the Xonar control panel doesn't let you tweak the boost, you could look at the Windows settings (right-click on the speaker icon in the notification tray and select Recording Devices, then the mic input on the Xonar, click Properties and look under the levels tab). On the Listen tab, you can tick "Listen to this device" which will send the mic input to the headphones for testing, so that you can monitor the level without using Teamspeak.
Also, make sure that on both the Playback and Recording tabs that the Xonar is set as Default Device and Default Communication Device. You'll probably want to disable the onboard soundcard as well, which you can do by going to Device Manager (you can open it by going Start Menu - Run and typing devmgmt.msc), then under "Sound, Video and game controllers", find the onboard sound, right-click and select Disable. Later, you should probably disable it from the BIOS but I'm not sure if it really matters.
For Bandicam, all I can suggest is check under Video - Settings that you've got the Sound Device settings correct. If you still have problems, you could try these Unified drivers http://maxedtech.com/asus-xonar-unified-drivers/ but I wouldn't think that would be necessary.
EDIT: Oh, you probably want to disable SVN (Smart Volume Normalisation) as well, as that will compress the sound, eliminating much of the dynamic range (difference between quiet and loud sounds).
And I forgot to say, congratulations and enjoy your new sound