[Milhouse]

1) Nothing to do with config.txt, it's a setting in advancedsettings.xml which is a file you need to create in /storage/.xbmc/userdata.

Thanks for the clarification. I was just a little confused because the instructions said "change to 1080p" twice and I thought I need to change it both in advancedsettings AND in config.txt (because the gpu_mem is there too)

Thanks again

Ah, well, it's also true you'll need to edit config.txt to set gpu_mem=256, but I thought you were referring to the <guires> setting and this is made in advancedsettings.xml. So really you need to edit both files...

---

P.S. In addition, for this part

For Rpi 512Mb set gpu_mem=256 and change GUI to 1080p.

I'm confused on what values should I change

This

gpu_mem=x

Or This

gpu_mem_256=128

There are two ways of setting gpu_mem - a way that works the same on all Pis, eg. gpu_mem=128, and then gpu_mem_xxx where xxx represents the amount of onboard memory, so gpu_mem_256=128 would set the GPU memory on a 256MB Pi to 128MB, and gpu_mem_512=160 would set the GPU memory on a 512MB Pi to 160MB. In your case you can just set gpu_mem=256 - this would be the same as setting gpu_mem_512=256, and any gpu_mem_256 setting will be ignored on your device (assuming your device is a 512MB model).