I can't quite tell if it works properly in this game? My sound settings are correct at 5.1 in windows, but it generally just seems to make the game really quiet. Any existing concensus on this? PCgamingWiki says the game supports surround 5.1, but isn't clear beyond that if it actually works properly.

Stereo is of course fine and works at a normal volume when selected, but of course 5.1 would be nice!

I don't think that Dolby Digital works as intended (why some sounds coming only from center channel speaker, but not voices, like in most games?). But there are some sounds positioning (i can hear doors closing behind me), so its better than nothing i guess.

The Silent Hill 2 Enhanced Edition seems to use the 'inderiectSound' dll mod to fix that game's spacial audio. I wonder if the same would work here? Might just copy those two files into the SH4 directory and see if it works...

So I can't tell if the dsound.dll from the Silent Hill 2 Enhanced Mod is doing anything beyond what the game's "Dolby Digital" setting already does. I can confirm via the config file that generates after running the game that the dsound.dll is loading itself properly into Silent Hill 4 though!

However, the major issue seems to be that spacial 3D audio works normally for this game in all channels, but that during cutscenes the voices are sent to the main stereo pair and not the center channel like they should be. During these cutscenes there is still audio from the other 4 speakers, so I'm thinking the engine just isn't designed to send voices through the proper channel?

There are quite a few config settings that can be tweaked the dsound.ini, but I'm not sure any of them will help if the game itself isn't mixed correectly?

I also had the game freeze during this test... but can't confirm if that was due to the dll or not. I think I'll delete it until someone else comes along with more info or a proper solution.

For 3D spatialisation and EAX effects i used Creative's ALchemy instead of Indirect Sound, with OpenAL Soft dll added to the game (renamed to oal.dll).
To use it you need to have OpenAL Soft binaries with HRTF tables (use precompiled ones, don't bother making them) on your pc.
Configure OpenAL Soft (for playback output channels and HRTF mode prefferences), copy & paste soft_oal.dll file to Silent Hill 4 folder and rename it to oal.dll. Now launch ALchemy application, add SH4 to games library and enable it. In game enable Dolby Digital.
Just remember: your headphones must be in stereo, without any virtual surround enhancements enabled.

Works perfect!

There is an video presentation on YT, but for unknown reason GOG doesn't allow me to post any links here.
Look for Silent Hill 4: The Room w/ 3D spatial sound,
you can find OpenAL Soft settings in the video descriptrion (i used slightly different ones)