IOSONO has 32 channels now, planning on 64 in the future. All the audio and positioning data can be saved in standard digital cinema formats. Yes, you need quite a bit of kit to do it. 300 channels or so for a normal theater.
One great thing is the array effect of maintaining equal volume of signals over the entire listening area. This helps keep the experience the same for all the audience. No more sweet spot problems for the theater
For cinema, a simple approach is to create a five channel planar array for ambiences and other envelopment sounds and then also create a 5 channel point source array for discreet stuff so that you can easily bring in already mixed 5.1 material.
Once that is done, you can then break elements out for motion of point sources around the room, SFX etc... after the two arrays, you still have 22 channels to play with. I'm sure there will be a million other options once folks get there hands on a system. It was a blast to play with.
It really is a new approach. A brave new world....
-bassman