The 2d sprites are actually placed in the 3d space but there rendered at the reverse depth which make them appear double at a lot of depth. If you use low depth(10%-20%) you won't have that problem, and the effect is still good enough.
Both the shadows and the sprites can be fixed by either an Nvidia profile, or an patch for arma 2. But that would depend on Nvidia and BIS.
I think S3d is not some feature to just forget about, especially for the BIS developers. The army would love to use an professional 3d HMD together with VBS ;)