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Iqfx2(Tm) Will Offer Improved Audio Quality To Over 125 Million Existing Realplayer & Realjukebox Users

The expanded agreement provides all RealPlayer®, RealPlayer Plus, RealJukebox(TM), and RealJukebox Plus users with the opportunity to download iQfx2 and/or iQfx2 Plus. With more than 125 million unique registered users of RealPlayer software, RealNetworks provides a valuable distribution channel for iQfx software both through its Web site and through the AutoUpdate feature in RealPlayer and RealJukebox. The suggested retail price for iQfx2 Plus is $29.95 and it is available for download from both Real.com Accessories (www.real.com/accessories) and QSound.com (www.qsound.com/products/iqfx2.asp).

``Our expanded distribution agreement with RealNetworks competitively positions our products in the current marketplace and promises a greater return moving forward,'' said David Gallagher, President and CEO, QSound Labs. ``We believe it reinforces the strength of our relationship with RealNetworks as well as our position as the foremost provider of 3D audio software products for the Internet.''

iQfx2 Plus will be replacing QSound's original iQfx(tm) software, currently the #1 selling product at RealNetworks' Real.com Accessories zone.

``We are very excited about today's release of iQfx2 and iQfx2 Plus,'' said Dave Richards, Vice President, Consumer Products, RealNetworks, Inc. ``We look forward to continuing our relationship with QSound Labs, the market leader in Internet audio effects.''

RealPlayer has more than 125 million unique registered users worldwide and is the gateway to the best audio and video programming on the Internet and the Real.com Network. RealJukebox, with over 34 million unique registered users, is the market-leading digital media jukebox software that enables users to easily record their personal CD collections to a PC hard disk, find and download Internet music, and manage their personal music collections on their PCs.

About iQfx2 & iQfx2 Plus

iQfx2 and iQfx2 Plus are new 3D audio software applications that integrate seamlessly with RealPlayer, Real Player Plus, RealJukebox and RealJukebox Plus. The software adds rich 3D stereo sound and improved audio quality to streaming Internet broadcasts and MP3 files - through both headphones and PC speakers.

iQfx2

* Stereo to 3D

* Qverb (TM): Hall reverb setting

* Qbass (TM): fully adjustable bass boost feature

* Headphone functionality

iQfx2 Plus

* Stereo to 3D

* Mono to 3D

* Qverb (TM): reverb feature that allows users to choose from 3

different listening environments

* Qbass (TM): fully adjustable bass boost feature

* Qxciter (TM): fully adjustable treble feature

* Headphone functionality

* Maximize MP3: option that automatically adjusts to deliver the

best possible MP3 listening experience About QSound Labs, Inc.

Since its inception in 1988, QSound Labs, Inc. has evolved into one of the world's leading audio technology companies and an e-commerce solution provider. The Company has developed proprietary, patent-protected audio solutions that include virtual surround sound, positional audio and stereo enhancement for the consumer electronics, multimedia PC, Internet and healthcare markets. The Company's cutting-edge audio technologies create 3D audio environments, allowing consumers to enjoy stereo surround sound from just two speakers. For more information, visit our Web site at www.qsound.com.

RealNetworks, RealPlayer, RealJukebox, and Real.com are trademarks or registered trademarks of RealNetworks, Inc.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, the anticipated introduction of new products and future financial results, including statements made by Mr. Gallagher. Investors are cautioned that such forward-looking statements involve risk and uncertainties, which could cause actual results, performance or achievements of the Company, or industry results to differ materially from those reflected in the forward-looking statements. Such risks and uncertainties include, but are not limited to, risks associated with the Company's ability to carry out its business strategy and marketing plans, including availability of sufficient resources to do so timely and cost effectively, dependence on the performance of third parties who have agreed to market the Company's technologies, dependence on intellectual property, uncertainties relating to product development and commercial introduction, rapid technological change, intense competition, system failures, virus and security vulnerability continued growth of the Internet, general economic and business conditions and other risks which may be detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. Forward-looking statements are based on the current expectations, projections and opinions of the Company's management, and the Company undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made, for example to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact:

     QSound Labs, Inc.
     Paula Murray, 954/796-8798
     Email: paula.murray@qsound.com
     Website: www.qsound.com