1024x768
1024x768 is a common computer monitor resolution. Found on older liquid crystal displays and smaller non-widescreen LCD monitors, 1024x768 mimics the default output resolution from most PCs running Vista or XP, and is optimized for these monitors.
1280x1024
This resolution is designed to accommodate larger or widescreen PC monitors. Selecting this resolution will also allow correct geometry for images sent by the console, without odd stretching effects.
Reference Black Levels
HDMI cables offer the option of changing the reference black level sent from the console to the display. This setting, although modifiable by the gamer, is really dependent on the television used. Improper settings can result in a loss of detail in dark areas on-screen. Selecting "Standard" optimizes black level for nearly all modern HD sets using HDMI, although your results may vary depending on your hardware.
HDMI Color Space
Three major color space options are enabled when using HDMI. RGB, YCbCr709, and YCbCr601 become available when an HDMI cable is detected. RGB is the default standard used for high definition sources, equally appropriate for HD gaming and movies. However, YCbCr601 is optimal for standard DVDs. If media is mixed often with the Xbox 360, selecting "Auto" from the options menu will detect and properly set the right color space for the media type in use.