IIRC, to get the xbox to deinterlace and produce 480p and (where games support it) 720p, you will need to chip your xbox and switch it into NTSC (USA) mode. The PAL (UK/Europe) xbox does not support progressive scan directly, like the USA one does.
I *believe* that if you just place your TV into progressive mode whilst running a standard PAL xbox, you will get 480p (the WH36 will deinterlace?) but I'm not definite on that.
Also, the xbox (either PAL or NTSC) will not play DVDs in progressive, AFAIK.