I'm not saying DVI doesn't look better than VGA, but the xbox-VGA on my TV can handle a ton of different resolutions including 1080p and it looks great. When I get it set up (and internet on monday) I will post the exact resolution I have my xbox at.
I'm really hesitant about buying high-end electronics from Wal-Mart. If you're just going to watch broadcast TV, then their stuff is fine, otherwise you'll generally want to avoid them: in order to reach those lower price points, companies downgrade the hardware inside the TV to save money. It's up to you, and if your priority is coming under budget, then you could do much worse.
