50/60 Hz Output Confusion
There has been some confusion in regards to 50/60 Hz output, due to the various dashboard updates which have changed the output settings, and also the separate issue of both gaming and video output (and throw in DVD output, which is again separate to video playback from the dashboard).
50 Hz output it optimal for playback of PAL video at 25 FPS.
First of all, the dashboard (including all non DVD playback through the dashboard, media center extender, USB, UPnP ...) will always default to 60 Hz if you are using any of the HDTV/component modes (including 576p). There is currently no way to force 50 Hz output mode in HDTV mode. The only way to make the dashboard video playback in 50 Hz mode is to use the SDTV mode, and this means resorting to 576i output - there is an option to set to PAL-50 or PAL-60 under "PAL Settings".
For gaming, the "PAL Settings" actually do affect the gaming refresh rate in HDTV gaming mode, even though the "PAL Settings" option only appear when SDTV is used. For example, you can force 50 Hz game output in HDTV mode by first switching to SDTV mode, set the "PAL Settings" option to PAL-50, save the setting and then switch back to HDTV mode. Note that some games do not support 50 Hz output mode, and you will get an error message when attempting to play these games at 50 Hz.
For DVD/HD DVD playback, things are somewhat different again. When you make changes to the HDTV output settings (eg. to change from 720p to 1080i), you will be asked if your screen supports 50 Hz output mode, if you select "Yes", the screen will refresh to 50 Hz temporarily and ask you again if you can see the screen. Regardless of whether you select "Yes" or "No" to this 50 Hz test, the screen will refresh back to 60 Hz after this test. If you did see the screen and you did select "Yes" to being able to use 50 Hz mode, then DVD and HD DVD playback will automatically switch to 50 Hz mode if the content being played is at 25 FPS. Otherwise, it will stay in 60 Hz mode. As mentioned before, this only affects DVD and HD DVD playback, not the playback of any other video files through the dashboard interface.