My name is Kevin Meyer (gamertag: doulWeapons) and I'm on the test team for some of the Xbox 360's system software like the dashboard and the guide. I'm going to talk a little bit about the exciting world of PAL video modes! Well, maybe it's not that exciting, but some users have had some confusion on the subject, so we at the Xbox Team blog thought we'd lend a hand in helping you understand what's going on, and what you can do.
The PAL video specification supports two frequencies for output, 50 and 60 hertz. The Xbox 360 supports both frequencies at standard definition (480i), but only outputs at 60hz for high def resolutions (480p, 720p, and 1080i). However, just because the system supports 50 Hz doesn't mean that every game will, and there are a handful of games that won't work at 50Hz. These include Feeding Frenzy and The Outfit among others. If your system is set to PAL 50 output mode, you will see a message telling you that the game doesn't support the current video mode. However, if you are in High Def mode, some of these games, like the two I mentioned above, will still show the warning.
There was a problem with an early version of the development kit given to game developers that still paid attention to the SD setting for PAL mode, even when your system is set to HD mode. This has since been fixed so new games that have the 50 Hz limitation for SD won't hit this problem, but it's a large amount of work for developers to go back and fix the games that already have the problem.
Lucky for you, there is an easy way to get around this problem. First you need to switch back to using SD mode - flip the switch on your Component HD AV pack to the SD setting, or temporarily swap out your VGA AV pack for a Component (SD) AV pack, S-Video pack, or HD pack set to SD mode.
Next go to the System Blade, pick Console Settings, then Display, and change your output mode to PAL 60.
Now just switch back to your HD video mode of choice, and you are ready to go.