Panning vertically?

Panning with dynamics (increasing volume while panning) can create the psychoacoustic illusion of something going from the back of the stage to the front.  Is this what you're referring to?

There is a theory that you can create the illusion of "height" with EQ... but only very slightly. The lower frequencies will sound to be coming from "below" and higher frequencies sound like they are coming from "above".
 
So to acheive that would require a moving bandpass EQ filter that is wide enough not to remove any of the meat of the signal as it moves but narrow enough to create the frequncy change that creates the "below/above" illusion.
 
You'd automate the EQ to move the bandpass (or parts of it) from the low frequency range (which sounds "below" you) up to a higher frequnecy range (which sound "above" you) or vice versa.
 
As I said in this theory that range of "height" is limited (and actually doesn't exist at all... it's just perception).
 
Adding a left right pan to the equation certainly does seem like it would distract the ears enough to accentuate the illusion as well.
 
Things like flanging kind of do this and it really does sound like rising and falling sound as the audible/bossted frequencies "rise" and "fall". Nothing is going up or down of course because stereo is left and right... exclusively.
 
Illusions.

good article drew. now , how to apply...