I just bought a pair of the XO7s today and found this thread looking for how to work the volume interface. I assumed that you would press game button then use +/- to change level, then press chat volume and do the same for chat level. After playing around a bit longer I worked out that the game/chat buttons are not select/toggle buttons, but are the BALANCE. So its simply:
+/- buttons = Volume
game/chat buttons = Balance (i.e. the balance between game and chat level for the given volume)
This may not be your problem, but mine work fine once I worked out what the buttons were actually doing.