One thing I notice with my Xbox 360 is that even in the Dashboard set to 1080p and the TV being definitely @ 1080p the screen doesn't look 'sharp' at all. Looks like it's upscaled while my PS3 looks fantastic.
I always thought the same thing, but when fiddling around with the HDMI settings on my TV I noticed it was upscaling everything (Along with muting the colour and doing edge enhancement). Could your monitor be doing something similar?
Edit: Apparently the guide always renders at 640x480 and is upscaled, regardless of what display setting you use.