If I'm being truthful, then I would say that I personally prefer the audio fidelity of the X1's. I know the X3's are a later model with 'improved' features, but there's something about the X1's that just clinches it for me.
I've said in the reply above that I play a lot of COD4, when I used to play with this headset, it was almost as if they were 5.1. I know it sounds silly, but I could pinpoint the direction that any particular sound was coming from.
I've never actually heard 5.1 headphones before so I can't make a direct comparison, but I can't imagine it being much better. I won't be upgrading again to the X4's because I don't really think the features will be that much better to what I have now.
The X1's have all the features you're used to. Mute control, volume control etc etc. The only problem I had was the actual red/white phono audio plugs that you connect to the back of the TV.
This cable is split into a "y" shape. You plug one into the tv, and the other end into the USB port of the 360. The Headphones draw power from your 360 to power them, and the audio is feed directly from your tv...So that means if you switch channels, whatever channel you're watching is the sound that you get.
Now the problme is on the "Y" end of the cable, there isn't a lot of give. So it was quite a tight fit connecting both ends of the cable between my 360 and TV. You might have to juggle you equipment around a little to get your console closer to the phono sockets.
Put it this way, it doesn't matter what version you buy, just make sure you get yourself a pair. They're that good.