You can run Ubuntu, Debian or Gentoo, have a look at the Xbox Linux Wiki I honestly wouldn't say its good enough for every day use however, when i last tested i could boot to the desktop with a 1024x768 screen resolution.
1024x768 is good enough for a web browser with a difference via linux though, or even opening up the possibilities of a true media machine if it was a dual boot, Boot into a true media system for audio an films then reboot back to a gaming machine with a difference due to the jtag. I like the sound of it lol
I dont believe the drivers in Linux were ever good enough to play video and from what i remember sound drivers did not exist.
does depend on the linux distro, I had one on the first xbox and that worked well but nothing shout about if i am honest
Indeed it was cool to see back in the Xbox Classic days when PC's and any sort of device you could hook up to the TV were stupidly expensive, however with cheap, low power devices like the Raspberry Pi that actually run Linux a lot better than the Xbox does it's not really a major plus any more i dont think.
Don't know if i would say it would run better on a pi, played with them and played with the xbox linux from the first xbox and there was a difference but with new advances, linux is becoming more of a contender look at the likes of dell they will even ship out laptops with linux on now, Hopefully a small slax with the right plugins would be perfect on the xbox360, after all the cpu an gpu's are just as good as a computers
That's true, however the drivers are extremely basic for Xbox 360 Linux. I dont think you have any sort of hardware acceleration, or even sound (unless something has changed) on the Xbox 360. Where as the Pi for example is capable of 1080p HD video playback with sound and is silent.
I would of said that due to the optical output on an xbox 360 you should be able to sort something. Lets face it hardware acceleration should not be too much of a task going as you should be able to just install the gpu as a plugin so to speak