Spent a solid 30 minutes testing it out and I gotta say, it works. It's a bit buggy, and on 2.2 if you enable HDMI out and then press the back key to exit to the home-screen you get a force close. It seems to FC a lot... These force closes are intended. They're fail safes so that you never get stuck in HDMI out only and can't use your phone without a battery pull.
Simple workaround is to just press the Home button.
I also noticed colors are greatly washed out. Very bright.
As for screen scaling, it only outputs the resolution of the display. This means, 854x480. So if you try and set it to 1280x720p @60hz you end up with a little rectangle in your screen. If you set it to 640x480 you get full scale top to bottom, however you miss out on approx 214 pixels width wise. So 107 pixels are cut off from left side and then another 107 pixels cut off from the right side.
Not too sure what else can be done about this however I do want to say one thing. When you play emulators, set them to "scaled." This takes the original 320x240 resolution image and scales it up to 640x480, fitting your screen perfectly. So for the sake of playing Sega, NES and Gameboy games 480p is the perfect setting. For using the phone normally, you have to stick with 720p and the black bars along the top and sides (because it is rendering a 854x480 resolution image in a 1280x720 resolution window so to speak)
Otherwise it works great and I am one happy customer. This app can only get better from here fellas. This is what we Droid X owners deserved from Motorola from day 1. Let's all thank this amazing programmer for unlocking such a critical aspect of our phones for us by supporting him and buying this app. Every X owner should have a copy of this app.