THUG supports to running in both 720p and 480p. The game does not support 1080i.
#1 Ensure you are using component cables to connect your XBox to your television.
#2 Connect the XBox directly to the television instead of through a receiver or switch.
Remember when you enable the 720p option in the XBox and a game that supports 720p, the XBox will output 720p whether or not the TV supports it. So the fix is to turn everything on EXCEPT 720p.
However, since you said you tried everything and your TV supports all the settings my only suggestion would be to give all the options a once over again just to be safe(check your TV and Xbox settings). If that doesn't work and this is the only game that gives you HD problems it sounds like you might have a bad disc. Take it back to the store if you can.
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