This page has little animations illustrating the two major binarual cues for sound source direction: Interaural Time Differences (ITDs) and Interaural Level Differences (ILDs).
You will need to listen to the sound tracks of the videos using headphones. To perceive the effects, you need to have good hearing in both ears. If you have a temporary or permanent hearing loss in one ear, the demos won't work for you. (sorry!) They also may not work if your headphones or the sound card on your computer are poor quality. A number of laptop sound cards in particular "cut corners" when it comes to reproducing some temporal features of sound with great accuracy, which will cause these demos not to work correctly. Also if you have the headphone the "wrong way 'round" (i.e. the transducer that is meant to go to the left ear connected to your right ear) then the sound may appear to come from "the wrong side".
What to observe
The demos below show and play short 500 Hz tone pips which vary either in ITD only, or in ILD only, or in both ILD and ITD at the same time.
The first demo shows variation in ITD alone, starting with the left ear leading by 0.4 ms, then the ITDs shift in steps of 0.2 ms until the right ear leads by 0.4 ms, and then they shift back. If the demo is working as it should, you will hear the sound source appear to move from a place somewhere slightly to the left to somewhere slightly to the right.
Varying ITDs Only
The second demo keeps ITDs constant at zero, but changes ILDs, so that the left ear sound is initially 6 dB more intense. The ILD then shifts in 3 dB steps to the right, and back again. These ILDs are exploited in stereophonic music, and you will not be surprised that they can appear to shift the sound source to the left or to the right, but you may find it peculiar that either changing ITDs or changing ILDs can lead to similar perceived changes in sound source position, even though they do very different things to the sound.
Varying ILDs Only
Of course, for normal, free-field sound sources, ITDs and ILDs covary, i.e. the sound will be both earlier and more intense in the nearer ear. The most natural situation is therefore the one shown in the 3rd demo, where ITDs and ILDs vary together. If your ears are like mine, then the impression of a moving sound source in this 3rd example will be clearer and more compelling, and the source will seem to move over a wider range, than in the first two examples.
Varying ITDs and ILDs together
With artificial headphone sounds we can also make ITD cues and ILD cues oppose each other, i.e. the sound might start earlier in the left ear but be louder in the right. With such conflicting cues, our brains tend to perceive "compromise" positions near the midline, a phenomenon described as "cue trading". This is illustrated in the fourth example. Here, the sound source should appear to move much less than in the 3rd, and possibly also less than in either the 1st and 2nd examples.
Trading ITDs off against ILDs
Individuals tend to vary somewhat in how sensitive they are to ITDs, and if your sensitivity to ITDs is very low then you may not hear any movement in the first example, and not much difference in the 2nd to 4th examples. (However, it is also possible that the sound card or sound software on your computer is cutting corners and not reproducing ITDs accurately, as seems to be the case for example on my Acer Aspire 1810 laptop). In contrast, if you are very sensitive to ITDs, you may find that the first example gives more compelling movement than the 2nd. Your individual sensitivity to ITDs will affect how much movement you hear in the 4th example, if any, and in which direction.