That Tv has a great picture on it I sold a 65712 Diamond that Ihad for a few years and got the 65732 . Here is something I found about the VGA
VGA ports on many TVs assumes that a computer is driving it, as opposed to an A/V source. Unfortunately, the world of PC uses a different range of values for each color component than the more limited range used in video domain. So when we output the proper video signal, it gets treated like an anemic video signal with washed out quality. In the new software, you will be able to instruct the 360 to convert its signals to PC levels, and hence solve this issue.
http://www.avsforum.com/avs-vb/showthread.php?p=10218826&highlight=Xbox+360#post10218826
Answering other questions, both Xbox 360 Elite and current Xbox 360 units will have a spring (console) update which adds support for different video levels for VGA output (“7.5 IRE vs 0”). And as someone mentioned, using this setting you should be able to use computer monitors in addition to TVs with resolutions all the way up to 1080p with high fidelity and no issues with HDCP handshaking. So for current users, I highly recommend trying this update with your VGA connection to see if it does the job for you. Note that this is a console update and will work for both games and of course, HD DVD. The HD DVD software update is separate from this (and will be available on both Xbox Live and xbox.com).
http://forum.teamxbox.com/showthread.php?t=516982&highlight=vga+spring+update