I just programmed a different button on the remote to do Ctrl-L, and it worked. I then pressed the original button i'd been trying to program and it was now working. Weird.
Hmmm, I too cannot get my original XBOX DVD Remote to work nicely with Flirc.
Given all the references in the OP implying it's not compatible, would you mind sharing any tips/tricks you used to get it working for yourself?