Is there a good way to set up an Xbox if the user doesn’t have line-of-sight from the IR controller to the port on the console, for example if its’ going to be in an A/V closet without windows?
Are there fiber optic leads that can be run into the closet for such purposes?

The 360 uses standard IR tech so check in the Home Theater forums for recommendatiions on IR repeaters.
Something like this:
http://www.4electronicwarehouse.com/blog/setup-infrared-repeater-extender-system.html

I have used the X10 Pyramids for a year or so without problem. Might not want to see that in your space, but they are fairly small. Off ebay, you can get them for half what the x10 site sells them for. This would be a plug and play solution once the mail man drops it off.

Controllers are RF and remote is IR, correct?

Controllers are proprietary Microsoft encryption over non-standard bluetooth, iirc, or something very similar.

"Controllers are proprietary Microsoft encryption over non-standard bluetooth"

Which would be like every other proprietary "RF" format. So, it's RF.