Whenever i play on my xbox 360 i feel like there is an about 1 or 2 second lag inbetween me pressing the button and the TV displaying it. any help on what i can do to stop it?
No, I wouldn't try using Google TV with video games that require twitch reflexes. It's just the way that the Intel CE4150 processor intercepts and process the signal which causes the delay. There's currently is no way to disable it on either Sony or Logitech's Google TV product lines.
I changed from HDMI 1080P to component 720P and there is no more lag, is this the way im going to have to do it until what you mentioned in your post?
The lag is still there, just at a smaller quantity which makes it less apparent. This is because there are less pixels too process, but yes... if you can deal with it at 720p then you're good to go.