Best display setup for Xbox 360

[scorp]

What the best possible display setup for the Xbox 360 for HDTV sets, i have 1360x768 (or whatever) in VGA, is that a decent resolution or are the native HDTV modes (720p/etc) better?

I currently use a Xbox VGA video connector with a VGA->DVI adaptor in the back of my set.

Also, does the cabling make a difference, i can still see faint horizontal ghosting bands when there are large contrasting blocks of colour too.