I have just installed a 720p Panasonic videoprojector to hook the 360 to with the component lead. Setting the switch on the lead to HDTV, and the console display to 720p the dashboard and games look really great. However, PAL DVD suffer from terrible visual artifacts (horizontal bands with a different video level from the rest of the picture, they seem to originate from bright spots on the film picture) that look totally like bad MPEG2 decoding. The video does not stutter like I have read it does for other owners.
It does this for all HD settings, even the 480i one which is not HD at all. Of course one can only get 60Hz for HD output which is absolute bollocks anyway (have Microsoft ever heard of a place called Europe?). The only way to get the problem to disappear is to manually switch from HDTV to TV on the cable, and set the XBOX SD TV settings to 50Hz.
Basically this means switching EVERY time I want to watch a DVD rather than play a game.
Has anybody found a workaround?