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Please note that this information floating around the internet is not correct. These settings refer to the sound envelope used by the game. (War Tapes, Hi-Fi, Headphones, etc.)
Different sound profiles tax your cpu more or less depending on the effects, etc. applied to them. Also note that there is a bug in the GUI that when you open the settings it will reset this to "1". (Hi-Fi)
That's bizarre, as my fps definitely appear to be better since changing this switch. I'll do some more testing & with different settings & see what happens. I did just tested the GUI bug you mentioned but it didn't reset it for me.
Here are some links about the sound engine in BFBC2:
http://blogs.battlefield.ea.com/battlefield_bad_company/archive/2010/01/22/an-audiophile-s-guide-to-bf-bc2-full.aspx##
http://forums.electronicarts.co.uk/12370854-post155.html
The different settings will have different taxing effects on your CPU. If you're cpu bound this will be especially noticeable. The command line option +fullproc *might* have a positive effect on the overall utilization if you have a quad core CPU, as it is implied that by default the game is limited to two cores.