Pat,
It uses regular headphones but must be of sufficient quality in order to use high impedence headphones.

I spent some time with the Anthem D1, which also has Dolby Headphone, and was able to use my Sennheiser 600s with it, without a problem, and thoroughly enjoyed watching movies using headphones. You won't probably get the same levels of bass and of course no sound pressure waves during explosions, but, Dolby Headphone is the best there is, IMO, for watching a movie late at night or when the baby is sleeping.

As for how the 990's Headphone amp and Dolby Headphone compares to that of the uber expensive Anthem D1, remains to be seen, and heard.