what res would you recomend?
720p on HDTVs, monitors, highest as u can because the Xbox 360 has a better scaler chip then the PS3 does.
All Xbox 360 and PS3 games are not 1080p native, only 720p or lower and is upscaled to 720p and higher. If u want the best picture possible, i recommend 720p. Usually i can tell but my eyes are not trained enough n i cant really count pixel for pixel. Try switching from 1080p to 720p manually through the Xbox 360 display settings when playing any game, like Halo 3 for example. That game was proven to be 640p because of a guy named Quaz51 on beyond 3d forums. Here is a list of most PS3 and Xbox 360 titles of proven native resolutions of the games (remember, count on any HDTV pixel by pixel):
List of Game Rendering Resolutions + some info on the hardware scaling - Beyond3D Forum
like Haze, which is 1024x576, play that at 1080p n then back at 720p, u will notice a huge difference. 1080p is worse for that game.
here is what u have to take note. Playing a game at just 720p should be like putting a picture on that HDTV at that exact resolution it will be smaller with black bars going all the way around, the aspect ratio, right? Well that true for pictures if u put it in a PS3 or Xbox 360, set it to original size then boom that is the true native, pixel for pixel, resolution. Now for games, it does the same, but instead it streches it across the screen to cover the whole HDTV which can look horrible (take PS2 and Wii n do that). Upscaling, or upconverting, just basically cuts that idea and instead recreates that picture of any game in pixel lines to try to make it look better, depending on the quality of the scaler chip (Xbox 360 > PS3, tested it in videos as well). Here is an article from IGN comparing native 480p vs 480p upscaling on the PS3:
IGN: PlayStation 3 Upscaling Comparison
and btw, Xbox 360, from what i was told, upscales DVDs too, but idk about games though. Depends on ur judgement i about this, i just hate the idea of being told about games being playing in HD but it doesnt even hit or is even lower then the HD standard resolution in the market, 720p; all 720p HDTVs get upscaled to 1366x768 because that is the 1080i resolution i think.