The issue (i think) is you're running your L/R into the DVD discrete input, which is expecting 6 inputs.
You have a few options:
1. Hook it up via the Toslink as jaxvon suggested. This is an "add on" cable. The regular HD cable doesn't give you this. This is the easiest.
2. If you have an HDTV, run the sound into that, then from your TV to your receiver (this is what i'm doing via digital out).
3. Run the sound out from the Xbox into a non 6.1 input (CD, VCR, etc) and set the receiver to output in Dolby Pro Logic IIx or some other surround mode. This is the cheapest.
The other thing to make sure is that you have your Xbox set to output in surround to begin with.