Oh it runs fine ... sorta ... just in large parties gets choppy performance. Shadows take up a lot of resources, and when there are lots of players having their shadows rendered it creates a lower FPS.
This is the case on both the PC version and 360 version. Powerful PCs will never notice this, laptops may.

Giving a Shadows toggle, which is already on the PC version, to the 360, -should- allow near constant 30 FPS on the 360.