I've been playing my 360 for a while on a large rear projection TV using the internal speakers and have been satisfied decently - the picture quality is quite good but the audio falters. I'm not sure what to attribute this to, but the problem gets slightly better when lowering the in-game volume. The biggest problem is in 'Splosion Man, which doesn't seem to have a volume control and suffers the most - it sounds like there's a brickwall-limiter in the audio code, causing an annoying 'pumping' compression sound. Other newer games also have trouble, especially Modern Warfare 2 where everything sounds loudness-maximized to the point I can't even hear my own gun firing over the ambiance of the maps. Other games are fine, Brutal Legend sounds great and so does Assassin's Creed. I'm using a fairly old and used component HD cable with the three video heads and two stereo audio heads connected to the TV. If anyone knows a solution to this problem I'd appreciate it.
Bonus question (and what I really came here for): I'm considering switching to a smaller set-up and playing with headphones. I have a Soundblaster Extigy (external version of the Audigy) which has independent TOSLINK support. I believe I can use this to connect the XBOX to headphones with properly virtualized surround sound. Any opinions? Will this work? Will it improve the sound?
Bonus question (and what I really came here for): I'm considering switching to a smaller set-up and playing with headphones. I have a Soundblaster Extigy (external version of the Audigy) which has independent TOSLINK support. I believe I can use this to connect the XBOX to headphones with properly virtualized surround sound. Any opinions? Will this work? Will it improve the sound?