Obviously you have a modded XBox so you can patch it for 480p DVD plackback. That helps a bit. I don't know if your television is HD (or ED in the case of 480p) capable so it may not matter.
It is really going to depend on what you consider good, how picky you are (do you know what properly balanced color is supposed to look like), and what type of display you are using (bigger size and higher res is more revealing of flaws). If you ask this question at avsforum they are going to tell you it sucks but most of these guys have at least $5K+ in audio/video equipment (although the consensus is that there are cheap $80 players that are significantly better). If you ask most people on this forum they will tell you it's great and produces as good a picture as they've seen (although just about anyone will tell you the remote is clunky and a universal replacement is a good idea).
For me - I'll take a standalone. Video quality aside (Xbox suffers from the chroma bug and limits IRE black levels with no override if you want a few of the technical flaws), a standalone has more options and tends to function more smoothly. As to which standalone, whether the price trade off is worth a $20 DVD kit to you, and the issue of your single component input - that's all up to you. That being said, spend the $20 now (you get the remote dongle for XBMC use), patch the dash or DVDX (DVD2X doesn't allow the remote), and if you are unhappy, think about upgrading later.