I just purchased a Xbox 360 Elite and was presented with the question of how should I configure the screen’s “Reference Level” on the Video configuration menu of the Xbox 360.
The Reference Level of the 360 is similar to the PS3′s RGB Full Range option. As I said on that article, most HDTVs only support a limited range of black to white, for that reason, most people with HD Televisions should have it set to Standard, and people with PC monitors should set it to Expanded, but just as I said in my article about Full RGB, the best course of action is to test it and select the proper setting for your TV or Monitor.
The best way to know how you should configure the “Reference Level” option is to download the following Image and take it to your Xbox 360, be it using a USB device or from your PC using Media Center or Windows Media Player 11.
Once you have it there, you just have to change the “Reference Level” option located in the Video configuration menu to Expanded and then go to the MEDIA blade to display it in full screen and look for the 28 squares.
If you can’t see them at first, try raising the brightness of your HDTV or Monitor, but if even then you can’t see every square, change the option to Intermediate and check it again. If you still can’t see them all, then change the option to Standard and see how every square is now displayed correctly and leave it that way.
I made the mistake of setting it to Expanded and play the Condemned 2 demo without checking it first, and if the game is dark as it is, that way I could see very little in the dark (after raising the brightness level in-game a lot, because at first it was pitch black).
Once I was done with the demo I checked it with my Test Image, and I couldn’t see a single square, not even by raising the brightness of my Bravia 26T3000 to 100%. Then I changed it back to Standard and I could see them all.
If you want to change that setting, use the Test Image to be sure it works OK.