The cues for localization are Interaural Intensity Difference (IID), Interaural Time Delay (ITD), and spectral information including distance cues and head-related transfer functions (HRTF).
The scripts in loc.scm compare the two illusions (using fm-violin notes mixed into a stereo field) based on IID and ITD. Spectral information is a future topic (220b). Briefly, two types of information are available to synthesis CLM-style: distance cues that mimic the greater absorption of high-frequencies as sound travels through air, and HRTF impulse responses convolved with each ear for binaural headphone listening. These IR's contain detailed information about head shadows and various reflections (ear parts, shoulders, etc.).

Though we can't run this properly in Snd yet (small coding project remains yet), the idea is that each note event can contribute to each output channel trhough a panning procedure, as well as to a global reverb. As in the fm-violin, an instrument can easily incorporate this functionality with the locsig unit generator:

From Bill Schottstaedt's CLM Manual entry on the locsig unit generator
"Locsig normally takes the place of outa and outb in an instrument. It tries to place a signal between outa and outb in an extremely dumb manner, it just scales the
respective amplitudes ("that old trick never works"). Reverb determines how much of the direct signal gets sent to the reverberator. Distance tries to imitate a
distance cue by fooling with the relative amounts of direct and reverberated signal (independent of reverb). Distance should be greater than or equal to 1.0. Locsig
is a kludge, but then so is any pretence of placement when you're piping the signal out a loudspeaker. It is my current belief that locsig does the "right" thing for all
the wrong reasons; a good concert hall provides "auditory spaciousness" by interfering with the ear's attempt to localize a sound -- that is, a diffuse sound source is
the ideal! By sending an arbitrary mix of signal and reverberation to various speakers, locsig gives you a very diffuse "source"; it does the opposite of what it claims
to do, and by some perversity of Mother Nature, that is what you want. (See "Binaural Phenomena" by J Blauert)."

That accomplishes at least the IID -style localization. Fernando has improved the pitcure with "dloscig" to include ITD and will describe it next quarter.
Dlocsig can "render" an event into various representations of the soundfield. Ambisonics is a representation in W,X,Y,Z coordinates which dlocsig can interface with.

SPATIAL HEARING MECHANISMS and SOUND REPRODUCTION
D.G. Malham, University of York, England 1998 (on Ambisonics)