I have now tried five different ones (four official and one Gamestop), and the whistling is there with all of them, regardless of whether they are plugged into the XIM or directly into the Xbox. I'm convinced that the problem has to be with wired controllers in general. I just got back from Gamestop where I got one of their official controllers which I've seen a few people recommend for the problem, and it made the whistle even louder. The mic shouldn't really matter since the sound is present with or without one plugged in. I've been crossing my fingers for the new firmware that's coming soon, but I'm not really sure that will help now if the problem has absolutely nothing to do with the XIM unit.

It's good to know that the problem is with the wired controllers themselves, but it also looks like there's no real solution unless you want to go out of your way with a goofy, elaborate setup. It appears to purely be the interaction between wired controllers and an audio amp. It doesn't matter if I even have a mic connected. There is absolutely no whistling with wireless controllers. It doesn't matter if the controller is connected to the XIM 3 or to the Xbox 360 directly. I have gone through four official Microsoft wired controllers, and the problem persists with all of them. The more I tilt the volume balance towards voice chat, the louder the whistle gets. I use the Astro Mixamp, and I get that high-pitched whistling noise the second I connect the 2.5mm chat cable to the wired controller. I can't believe I'm just now stumbling upon this thread. the issue has nothing to do with the XIM3 (confirmed by plugging the controller directly into the Xbox 360). The whine begins as soon as the Xbox 360 tries to assign a number to the controller. Note that there is no 'whine' from the Microsoft controller if it is plugged into a PC. However, some people hear their own voices with the 'headset' setting (most likely due to my open-back headphones), so to eliminate that I set the Xbox to output voice to 'speakers.' Of course, the trade-off for that is that people sound as though they are speaking in a cavern. Other people's voices still have a faint whine with the Xbox set to output voice to 'headset,' but that is greatly reduced using a bit of EQ.

By doing that, all outbound communication noise was eliminated. That reduced the noise, but there was still a 'whine' using an official Microsoft controller, so I replaced that with a GameStop model BB-070.

My setup was noisier with the Turtle Beach DSS 7.1 plugged into the Xbox 360, so I switched to an AC/USB adapter for the DSS's power.

Headset making high pitched noise