USB to VGA does work! I can't remember who did it or what make the guy used, it was over at gp32x.de and was in the first couple of months of production.. may/june time IIRC
I have no idea if those other converters would work, without the DSP working we will unlikely get 720p running smooth but I am pretty sure that will be possible someday. Maybe soon who knows. Although if the adapter does work I would imagine XFCE would work in 1080p resolution but there would be no benefit as video files wouldn't be able to decode fast enough to display in 1080p. another thought USB 2.0 has a theoretical limit of 480Mpbs and I doubt that is enough to carry all the data required for 1080P without some crazy compression or downscaling.
Just for the record playing DVD rips on the Pandora is beautiful already on the small screen, there isn't a day goes bye I don't use my Pandora, PSX primarily, but also watching shows like Paun Stars/American Pickers while travelling, Internet even the odd bit of porn but I'm sure you don't meed to know any more on that matter LOL.
Flash support is better than reported in my opinion, 240 res youtube is great going any higher and it starts to slow, again will improve with DSP support.