After reading the link you gave I am afraid that I can not be of much help. I do not know anything about the xbox.

Here is what little I could figure out.
1 – The xbox button/switches must be pulled LOW foe something to happen.
2 – The information given about the project is incomplete, might make a good soldering tutorial.
3 – The code you have is not very good, even the author said it works MOST of the time.

I added some comments to the code you have. Hopefully it will explain some.
Code:
         ' {$STAMP BS2}
' {$PBASIC 2.5}


R PIN 15        ' R X Y G switches OR buttons on xbox?
X PIN 14
Y PIN 13
G PIN 12


INPUT R        'in PBP same as TRIS?.? = 1
INPUT X
INPUT Y
LOW G         'is not used in program

DO

DO
PAUSE 50
LOOP UNTIL IN7=1   'New switch ??? See comment below

'First R
LOW R              'makes pin LOW (0)
PAUSE 136
INPUT R           'in PBP same as TRIS?.? = 1
PAUSE 30

'Second R
LOW R
PAUSE 38
INPUT R

'X
LOW X
PAUSE 50
INPUT X
PAUSE 210

'Double Y
LOW Y
PAUSE 50
INPUT Y
PAUSE 50
LOW Y
PAUSE 50
INPUT Y
PAUSE 200

LOOP
The DO-LOOP in stamp language is similar to WHILE..WEND in PBP but backwards.
IF-THEN-ELSE could also be made to work. The idea is to keep the program in a loop until a condition is met.

Suggestions to you.
1 – If you already have PBP, forget about trying to convert BS2 stuff from someone else.
2 – Study PBP and become comfortable with a hand full of LEDs and switches and a PIC or two.
3 – If you are planning on a project like this one, study the device. Web sites like the one you have been looking at are a waste of time.

The most important thing is not to give up. I have been playing with PICs for seven years now and I am still a beginner. Built a lot of “cool” things, but still a beginner.