I think I've figured out which settings are best on the Xbox 360 (HDMI). Expanded is the superior display reference and source is the correct colour space. Choosing source will allow the Xbox to choose which colour mode is appropriate (I'm sure they would know over anyone else). Setting expanded makes black true black and white true white (0–255). A lot of people complained that it was too dark but I have a setting on my TV called black level which I set to high which corrects it. Expanded make a highly more dynamic image and is definitely worth setting. Finally, I have set my resolution to 720p as with all other resolutions the screen displays a pink hue whenever I open the dashboard system—I don't want to break my screen! :p Also, the Xbox is native 720p anyway so I assume it is correct.
Edit: I really want to use the optimal setting as the res is 1360 x 768p. It's not my exact res but at least it's better than 720p. Problem is it disables important display settings on my TV so I don't know what to set?! >:-( :p