I just finished comparing the vga picture quality between an xbox and the 360, on the same 19" sony trinitron flat crt pc monitor.
The xbox was connected to the monitor by a homemade vga cable (5BNC to vga cable connected to a MS HD pack), plus vga bios (enables the xbox to do true vga; transcoders, like the x2vga, was not necessary). I went this route, because it is true vga, and no conversion was taking place.
The 360 was connected to the monitor with a monster 360 vga cable.
Both were connected to the monitor at the same time (have two vga ins), with a switch on the front to change inputs.
The game i used to compare picture quality was Halo 2.
I tested them both at the same widescreen resolution, and then bumped up the 360's to 720p.
I tweaked the setting on the monitor for the two consoles, to the best that was possible (turned up the color temp. to high, contrast maxed, and brightness turned down until blacks were acceptable; not gray).
In both cases, the xbox gave me a noticeably superior quality of picture. The colors were more vibrant, and everything was much brighter (more contrast), while maintaining true blacks, and no washed-out colors. Basically, the xbox gave me the same type of picture quality i get with pc games on my monitor.
The simplest way i could describe the 360's vga picture quality to the xbox's, in one word, is dull.
Although the xbox gave the better picture, the 360's looks real good, and I would have been content with it if i had not compared it to the xbox, or any pc game for that matter.
It still is very odd that there is this very apparent issue with the vga capabilities of the 360.