I thought I would update this.
My Xbox recently got stolen so I had to buy a new one. I grabbed the cheapest used Xbox I could find. It was a v1.0 Xbox and it does not have this issue. The 480p problem is indeed a problem with the newer Xboxes.
Now I can play the emulators easily without having to run my dash in 480p (which is ugly on a 42" HDTV). Also, I don't have any of the problems with Sega games (Panzer Dragoon Orta, Gunvalkyrie, etc) only being able to be played in 480i, and having to switch settings around as a result.
If this bothers you as much as it did me I would suggest waiting until the 360 hits and buy an Xbox from someone abandoning theirs, just make sure that it is old, softmod it, and enjoy.