I just hooked my 360 up to my second LCD monitor. All I did was get the VGA cable thing and then did the sound by hooking up the two audio cables to the included splitter, and then plugging it into the right place on my sound card in my PC.
One bad thing about it is that I don't think you can switch easily between using the computer and playing Xbox, so you'd have to unplug the VGA cord every time you want to switch.
Look here for instructions:
http://hardware.teamxbox.com/reviews...D-AV-Cable/p1/