If You want to play multiplayer on minecraft you need to be in HD. You can do this by Putting a HDMI cable in your xbox and take out the 3 red,white and yellow cable.Then go on to display and change it to HD AV or whatever it says then put it to 720.IGNORE ALL THEM JERKS SAYING YOU NEED A HD TV YOU ONLY NEED A TV WITH A HDMI CABLE SLOT AND MOST TVS HAVE THEM SO YEAH. HOPE THIS HELPED
We just went through the same thing but got it working! The TV must be HD. You must go into the console settings, then into the settings and change it to HD (Ours was 1080P). So you have to basically tell your xbox that your TV is good enough for the game.
That was our problem, I can confirm that you DO NOT HAVE TO HAVE AN HDMI CABLE, the display cord coming out of our xbox allows you to switch it from TV to HDTV so make sure it is on HDTV and change your main settings on the xbox to 1080 and it should work. The settings are not in the game but on the actual menu at the top when you boot up the machine, scroll all the way over to the right.
How to two connect two remotes to Xbox live and play minecraft on a split screen. we bought the HDMI cable, connected it to the Xbox and TV, we then took out the red, yellow and white cables, changed from TV to HDi settings on television, went to settings on Xbox 360 and changed to HD 1080, sign in the first control as usual and sign in the second control as guest on Xbox live. you should now be able to play minecraft on a split screen this worked for us after trying everything else. Hopefully this will work for you. good luck.