IIRC, the X1 will crop 480 material, so that you get 800 x 450 of the 848 x 480 - you lose a few pixels from the sides and top/bottom, but this is less than the cropping you get from your tv. PAL is scaled to fit, and I don't think it crops the image.
So PAL is scaled down, and NTSC is 'pixel perfect'. In theory, you'll probably be better off playing PAL as PAL, and NTSC as NTSC, but try all combinations to see what looks best to you.
Gary.