ummm, I would have to differ with you here Twisted Symphony...My setup is pretty straightforward. Two B&W XT speakers just for Music, 7 Paradigm Speakers and a sub for Home Theater. When I listen to music, It's mainly on the B&W's, unless I have a multichannel DVDA or SACD (..ewww). BASS does not refer specifically to subwoofers. A good set of speakers do not need subs (for music).
HOWEVER, when listening to 2 discs (the only one I have two of is Nine Inch Nail's "With Teeth", one CD, one Dualdisc) I pop one into my CD unit and one into the 360 (Dualdisc set in Audio CD mode); the 360 is set to two channel. Set Speakers to B&W, play discs and switch sources.....less Bass response on 360; flatness - noticable, but only if you are listening closely. Switch to CD player and the god-awful DVD player (Pioneer 563-A). No discernable difference. Switch around the discs - same results. Wife is not as sensative, but she could hear a difference form the CD to 360 and the DVD to 360, none from CD to DVD.
So I would have to say the 360 needs an update, not my speakers.