The capturing and presentation of most of the sounds in the game are very good. There is still a time when it sounds more like GT's sounds, with tinny, digitized sounds. However, I think that is mostly in higher-pitch engines that don't have as much "growl" to them. When you digitize (segmenting each RPM into chunks of RPM range and then associating a spot on the Tach to them) you always lose some fidelity in this area. The only possible fix for this is to use smaller and smaller chunks of RPM, which means more pieces to process every second for all of the engine sounds. This game seems to do a better job of that than GT6, but then again, bigger hardware specs.
Surround sound is still (apparently, not officially) a work in progress. There is no 3D presence to any of the sounds, but there are sounds in all speakers. You will not hear a car pan from rear to front, you will only hear it disappear from rear and then suddenly pan up in the front, as if it is not in the 3D space around you.
Compared to other things, that is minor, though. I do hope they improve it.