From wikipedia...
There are true psychoacoustic effects introduced by the brain. For example, when a person listens to crackly and needle-on-vinyl hiss-filled records, he or she soon stops noticing the background noise, and enjoys the music. A person who does this habitually appears to forget about the noise altogether, and may not be able to tell you after listening if there was noise present. This effect is called psycho-acoustical masking.
The brain’s ability to perform such masking has been important for the adoption of a number of technologies; though in this age of digital signaling and high fidelity playback the effect is typically used to hide losses in compression rather than to cover up analog white noise. As another example of a psychoacoustic effect, the brain appears to use a correlative process for pattern recognition; much like is done in electronic circuits that look for signal patterns. When the threshold for acceptance of a correlative match is very low a person may perceive hearing a sought after pattern in pure noise or among sounds that are somewhat indicative, as the brain fills in the rest of the pattern. This is a psychoacoustic phantom effect. For example when a radio operator is straining to hear a weak Morse code signal in a noisy background, he or she often perceives hearing the pitch of tiny dots and dashes even when they are not present. In general, psychoacoustic phantom effects play an important role in any environment where people have heightened perceptions, such as when danger may be perceived to be near. (There is an analogous visual effect experienced by people standing watch in very dark places.
-RODION