[Gamester17]

I'm going to try to answer your questions but please start by reading this (link) and this (link) article on upscaling DVD basics so you will be able to grasp the concept first of all.

So what would the difference be to watch the movie on a PAL xbox? The source is still the same (assuming one PAL DVD and one NTSC DVD respectively), but with PAL, the TV would have to scale up the image instead of the xbox. Would there really be any difference in quality?

If your TV supports native 720p (1280x720 progressive pixels resolution) or more then it is a huge difference, trust me, the Xbox has a superb scaler chip which does a wonderfull job at upscaling standard-resolution video to high-definition resolutions. XBMC utilizes the Xbox GPU (Graphic Processor Unit) and the digital-to-analog converter/scaler chip to do a linear upscale of the picture which does improve/enhance the picture quality. I myself have a PAL Xbox that I converted to NTSC and with a components HD adapter cable have it conneced to a projector that features native 720p output and it looks beautiful, and I certainly notice a huge difference if I convert the Xbox back to PAL and connect it to the same projector via composite cable which gets me a 576i (720x576 interlaced) pixels resolution when playing back standard PAL DVD-Video movies.

There are a several standalone set-top DVD-players available today that does the same thing using a dedicated digital-to-analog converter/scaler (or digital-to-digital if got a DVI-D or HDMI output) chip to upscale reguular DVD-Video movies to 720p, 1080i or even 1080p. These players are usually quite expensive (and much more expensive then a used Xbox) but yet people are reporting that the Xbox and XBMC still does a better job at upscaling standard-resolution video to high-definition resolutions than most of them, read the discussion here (link). Know that now HD DVD and Blu-ray (blue-laser) standalone set-top players are becoming more and more available, and practicaly all of them do upscaling of standard-resolution video to high-definition resolutions, at least for original DVD-Video movies. Some only upsclale them to 720p or 1080i but others also do upscaling to 1080p. I have however not seen any reports on how they compare qualitywise to the Xbox with XBMC.

As far as I can see, the only reason why you'd need composite is to enable the 720p resolution FROM the xbox. But when watching a movie from the same source (assuming the TV isn't terrible at upscaling) there shouldn't be much of a difference, should there?

You can safly assume that all TV's do a terrible at upscaling standard-resolution video to high-definition resolutions, they do not enhance the picture anything at all, this is a reported fact, ...google for it if you do not believe me. (For one, there would be no need for those upscaling standalone set-top DVD-players if the chip in the TV did just as good of a job at it).

http://www.xboxmediacenter.com/wiki/inde...V_media.3F

Q: Does XBMC and Xbox support HDTV (High Definition TV) resolutions?, and HDTV media?
A: Yes and no, but the answer is a little more complicated than that, you see: Xbox/XBMC can output a 480p/720p/1080i signal (if you have a Xbox High Definition AV Pack/component cable) and upscale all low-resolution videos (like retail DVD-Video/Movies) to 720p (1280x720 pixels progressive) or 1080i (1920x1080 pixels interlaced) in hardware (linear upscale/upconvert). So XBMC have no problems with upscaling for example DVD-Video (720x480 NTSC/720x756 PAL) movies to HDTV 480p/720p/1080i. XBMC is even capable of playing native HD video (video/movies with native resolutions higher than 720x576) like 720p (1280x720) and 1080i (1920x1080), however there is here a big snag/limitation with that and that is that a standard Xbox only has a 733Mhz Intel Pentium-III CPU (processor) and that does not have the processing power to decode those native HD videos fast enough, (Microsoft® and DivX® recommends a 2.4 Ghz PC + 384MB RAM for 720p MPEG-4 playback!). This means that you might only get maybe 10-20fps (frames per seconds) displayed which would appear so jerky because of all dropped frames that it will be un-viewable. The only real solution if you want to play videos with native HD resolutions on Xbox is to buy or upgrade to a non-standard Xbox with a much faster CPU (processor), (like example the DreamX-1400 from FriendTech] which has a 1480Mhz Pentium-III that is at least capable of decoding all native HD videos encodec with MPEG-2 or MPEG-4 ASP (H.263) that are have up to 720p in native HDTV video resolution. FriendTech do offers trade-in). Note! You must enable/setup your HDTV settings in Microsoft dashboard, (on NTSC Xboxes).

To make this even clearer XBMC capability on a standard Xbox (with Intel 733Mhz PIII CPU):
* 720x480 pixel video output to 480p HDTV (720x480 progressive) = OK! (eg not upscaled).
* 720x480 pixel video output to 720p HDTV (1280x720 progressive) = OK! (eg upscaled).
* 720x480 pixel video output to 1080i HDTV (1920x1080 interlaced) = OK! (eg upscaled).
* 1280x720 pixel progressive video output to 720p HDTV (native 1280x720 progressive) = FAIL!
* 1920x1080 interlaced video output to 1080i HDTV (native 1920x1080 interlaced) = FAIL!

Note! All above that state FAIL don't actually fail to play, it's just that the Xbox CPU is to slow to decode/render the high resolution so it will drop so may frames (producing stuttering playback) that is will be un-viewable.

Please also check out the supported video formats and resolutions chart (link) in XBMC's online wiki manual, it lists which native video resolutions of common video-codecs to show what the Xbox CPU (system-processor) can handle. It might be off-topic when talking about scaling but it still an interesting read.