Just to make things clear(er)... here is my hook up.
Matrix with original HDD.
Should --> Boot to MS-Dash, and play back-up DVD-R discs.
It Does --> Boots to MS-Dash, and complains about invalid media with DVD-R
Matrix with replacement HDD.
Should --> Boot up to XBMC, and play EVERYTHING !!!
It Does --> Gives erratic dashboard errors, and refuses to boot; even to DVDs.
RCOA

- Will probably try to re-program Matrix.