From Microsoft's website:
"The Xbox passes through DTS sound for both DVD Video and Xbox games. Because of the tremendous advantages of the real-time Dolby Digital encoding capabilities of the Xbox it’s unlikely that a game studio would choose to use DTS. Dolby Digital is the audio format of choice for Xbox."

That's so troubling to me; I truly need DTS to convey the proper aural cues so I can be prepared to react when a Vermicious Knid is about to pounce on me right in the middle of an intense game.