Thanks for the prompt answer. I currently have the component connected and set to 1080i (as I have a 1080 screen). I will try the VGA lead then. I guess my screen should upscale from 720p to 1080 as good as the xbox would.
Your Xbox upscaling to 1080i won't look as good as buying a decent upscaling DVD player would. I have a Cambridge Audio player and comparing the two the Xbox had a more blurred look.