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Same setup, looks great
Oculus, thanks for posting your research. I started with the component cable between my XBox 360 and my 2407WFP, thinking I would get the best picture from that. But, yeah, the VGA cable is much better than the component cable on the 2407.
I'm using it at the 1920x1080 resolution (the vertical stretch, 10-11%, isn't that noticeable to me- playing GoW and everything looks good) and I didn't have any issues with setting the sharpness. The default settings looked great; no jaggies. I did notice that when I set the res to 1920x1080, the monitor adjusted itself (it popped up a window and the colors shifted til it was done). I didn't even try the 768 or 720 modes.
I just got the monitor and Xbox last week, so maybe the latest versions are now working better together.
I'm also using the DVI connection for my PC, and the picture quality is awesome.
Anyway, thanks again!