I had the up conversion set to on.
I fixed the problem! I hooked up the Xbox 360 to the V-aux port in the front temporarily, went to the system settings tab, changed to HD TV, widescreen, and changed 1080P to 720P. when i changed ports back to the HDMI Xbox was there. After reading the manual i learned that it will NOT upconvert or simple convert 1080P component to anything HDMI.
FYI, i talked to Gamestop and they are selling new 360 pro systems with the falcon mobo and HDMI port for 279, and if i trade in my current system and accessorries i am not using i will get about $210 off, so for about $80 i can get HDMI from Xbox and use the Xbox HD DVD add on without down converting anything
so i plan to do that this week or weekend.
as far as the system is concerned it sounds really good, but it needs some tweaking. can anyone explain about the Audessy setup, it wants to sample from many different listening positions, does that mean moving the mic from one couch to the other within your room, or does it mean it simply wants to run the setup over and over from the same spot to make sure it is reading accurately? I ran it twice, once from one couch, once from the other. it takes a long time to run so i only want to run it as little as possible, especially since keeping my wife quite for 30 min will be hard!