The XBox 360 has a decent internal video scaler to scale up to 1920x1080, but very few games run at that resolution natively due to to limited resources. Some games don't even run at 1280x720, like Halo 3.

As for games, I haven't kept up with the 360 much lately. My studios first game, Darksiders, comes out in early January. It's a Zelda adventure like game, where you play as one of the horseman, 100 years after the apocalypse.