"Two-channel playback in a normal living space can provide an experience that is fully satisfying. Loudspeakers and room disappear and the illusion of listening into a different space takes over."
This is definitely not true. I've never met anybody (except a copuple of over enthusiastic audiophiles who need a strong reality check) who would confuse the sound of any stereo in any normal living space with the sound of a real concert hall.
And this is not because of "insufficient dynamic range" or "inadequate polar response of typical box loudspeaker designs" or whatnot. This is fundamentally impossible with stereo reproduction.
I'll echo acd483's comments here.
In a properly treated room, with a really good
high resolution, and full range system, you can get frighteningly close to real.
When I was studying classical in college, I had the opportunity to attend dozens and dozens of classical performances in our school's auditorium (which was excellent). When I listen to a good classical recording with the room darkened, if I close my eyes for a few moments and really listen to the music, it's frighteningly like being there.
I actually attended a performance of the Yamato Drummers of Japan at Roy Thompson Hall in ( a really great acoustic venue here)Toronto last Saturday. During the course of 2 hours, I spent much of it listening with my eyes closed, paying close attention to the soundstage and localization of instruments.
I was sitting in the 2nd balcony, and aside from some late reflections (late echoes) that are always very prominant with sharp percussive sounds, I think that a good stereo recording done from somewhere on the floor would have been even more impressive to listen to than the live event. There wasn't as much low end extension in the hall as I expected from where I was sitting. Dynamics were not as impressive as I've heard on recordings either.
The other thing that you really notice as well is the noisefloor. That many people breathing, rustling in their seats, whispering, and so forth makes a noticeable noisefloor that can be eliminated during a closed recording session. You can also eliminate the air conditioning to lower the noise floor even more.
Yamato Drummers of Japan:
http://www.youtube.com/watch?v=pZO47QxV-iYCheers