Hi John,
The stereo knob controls the width of the delay and I wouldn't think you would need a stereo input because it controls the output of the effect ... but I could be wrong. I used a Mono .wav, but the output of the track was set to Stereo. Think of it as a stereo chorus, or stereo delay on a guitar.
To see if I was mistaken, I just tried it on a stereo file as well, and it has no effect on it either. Sharke's original file was stereo and it had no effect on that, that's why I tried it a different way.