If there's anyone who hasn't figured it out yet, if you can't use items, speak with party members or stuff like that even though you are playing from a dvd, delete the folder called "cache" on Z: and reboot.
Worked for me every time I tried.
I've downloaded the ntsc version, followed the tutorial on xbox-scene to change the lay-out of the files in the iso to that of the retail disc and burned it on a mam-e mitsui dvd+r and it works fine. I'm playing it on a version 1.1 xbox with a samsung dvd-drive.
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