Eureka!

Called up 18004MYXBOX and spoke with "Valerie" (pronounced like malaria - I think it's funny how the call center ppl in India pick american names .. I suppose it makes sense since I'd probably never be able to remember/write down who I'm speaking to otherwise b/c I'm not familiar with their names either).

Anyway, i digress.  They agreed to send me a new controller to replace the one that isn't working (even though it's really working but not compatible with their headset).

So I will send it back to me (on my nickel) and expect one within some reasonable amount of time.

I will post my ticket #s for anyone to reference (after I get my controller - don't want to anger anyone while they are treating me nice).

The going theory on the events up until now is that they've added something to the controllers to make them work with the headset.  They only started adding this magical piece after X date.  My original 360 controller was before this magical X date and the one I purchased aftermarket is post-magical date.

I wonder how 3rd party controllers fare with the headset?  Anyone have any experience?

At any rate, it's a good step.  I'd love to see them be more open if there is a problem .... I refuse to believe I'm alone on this given the youtube video and comments.