This talk will explore a series of experiments that have examined our ability to localise the source of a sound and how the spatial separation of sound sources is utilised in parsing concurrent sounds. Human psychophysical performance has been measured in the real free field and in virtual auditory space. The latter stimulus approach allows experimental paradigms that are not possible using real free field stimuli. These experiments have demonstrated that the fidelity of our perception of the location of the source of a talker plays a significant role in speech intelligibility in situation there are multiple concurrent talkers (the so called cocktail party effect).