The X-Box 360 supports direct HD why upconvert ?
Is your client using the Xbox 360 HD AV cable ? If not one can be purchase for not very much. $29.99 at Best Buy
http://www.bestbuy.com/site/olspage.jsp?skuId=8362595&st=xbox++360+hd+cable&lp=2&type=product&cp=1&id=1177717628274
It would make better sense to use component out of X-box 360 and convert that to HDMI rather than use composite output an try to upconvert even though the Onkyo 705 can functionally do that!
===
Connect an Xbox 360 console to a high-definition TV 1. Turn off the Xbox 360 console.
2. Connect the audio-visual (AV) connector on the Component HD AV Cable to the AV port on the Xbox 360 console.
3. Set the HDTV switch on the AV Connector to HDTV.
Note Only set the switch to HDTV if the TV supports high-definition resolution, such as 480p, 720p, 1080i, or 1080p. 1080p became supported after the November 2006 Xbox Live update.
4. Connect the red, green, and blue RCA connectors on the Component HD AV Cable to the corresponding color input jacks on the high-definition TV. Do not use the yellow RCA composite video connector.
5. Connect the red and white RCA audio connectors on the Component HD AV Cable to the corresponding colored input jacks on the HDTV.
6. Turn on the Xbox 360 console. From the System section, you can change your display and HDTV settings. Select the appropriate high-definition video setting for the HDTV.