I've got a Zune 120GB and I love the damn thing. With a good set of headphones (I use Shure SCL3's) the audio quality is great. I do like it better than my old shuffle, nano or classic ipod. It sounds better as well.
One of my biggest and best surprises (and a somewhat large gripe with the...
MS bans the console itself. Changing the DVD drive won't help. You'd have to switch the guts of the 360 so it would report as a different console all together.
Also it's not the firmware that will get you banned, it's running non-stealthed games.
If it is upscaling, then it would seam to make sence it would look better. Like an upscaled DVD. No where near as nice as true HD but better than nothing. I don't know how your monitor would handle the image though. If it upscales to a 720p resolution (16:9) then the image may be stretched...
I have also see some video card outputting 30Hz when in 1080i and only going to 60hz for 1080p. Like everyone else has said, use the LCD's native resolution.