Just got a call from a mate, who bought this 'XBOX on Factory TFT Screen' (http://www.asllogistics.com/ford_upgrades.html) from ASL Logisitcs to run his modified Xbox into his 2003 Ford BA Falcon XR6 Turbo.
Now in the ad it says "Please Note: Xbox must be set to NTSC mode for correct operation.".
His Xbox has the option for video out to be NTSC-M or PAL - PAL being what he usually uses for TV's and that. NTSC-M (which I have just found out seems to be the US standard) would be what we assumed we'd use for this application.
However, the picture is terrible. Found another option in settings, adn this time there is PAL, NTSC-M and NTSC-J listed. Tried all the combinations and not working properly, any ideas? Just that ASL Logistics have made it quiet clear they are not interested in providing any help/support on the Xbox side of things (which is fair enough as that's not part of what they have sold), but at the moment we can't tell if it's his Xbox that's teh issue or the product...

What input's does the TFT screen have?

not sure if this will help but the PAL xbox's have a setting to change the refresh rate to 60Hz. from the factory it is disabled, if you haven't already try setting it to 60Hz and then try the NTSC settings. I'm still at work but i'll check the settings when i get home on the xbox and see if that actually will make a difference.

No idea, its the factory ICC Premium Sound system screen.

You need to have a 60Hz PAL converter to use a Xbox on the Premium Screens.
You can set the Xbox to NTSC mode but when you play any PAL games it will not work.
Been there and done that!!!!!
Talk to Fadi at ASL for a convertion box. Got my Xbox working fine on mine using one of ASL's boxes.

A photo of the 'bad image' will help wonders in diagnostics.