The EEPROM is a small chip on the Xbox that contains various settings. xemu emulates this EEPROM and the contents are stored in a file which you can select in the xemu Settings dialog.
When you start xemu, if you have not provided an desired EEPROM image file a valid EEPROM image will be generated for you.
Editing Your EEPROM¶
xemu doesn't support surround sound at this time, do not enable this in your eeprom.