Q:

How to detect, using matlab, the center of the biggest circle?

The goal is to preprocess an image in a way that outside the circle isn't in the region-of-interest so set its value to 0 (black). That way the followed step of segmentation will be easier to analyze all the blobs that exists inside that circle.
My instance isn't this one in particular, but this example is somewhat close enough 

I was thinking of applying an X across the whole picture, and detecting the outer most intersection of the the X and O, then from there calculate the center, assuming there's no noise on the edges of the rectangle in which the circle is in.
OR is there a way in Matlab that can already assist me with this?

A:

Would the built-in function imfindcircles work for you?  The radius and center are both returned. The examples are included in the same page. The function is based on Hough transform so it might be an overkill.
Another much faster method is regionprops. You may use this function only after binarizing the image first, and that means there must be a contrast difference between the region inside and outside the circle. You may try something like this (copied from this post):
st = regionprops( ~BW, 'Area', 'Centroid', 'PixelIdxList' );

sel = [st.Area] > numel(BW)*0.5; % exclude the small regions
st = st(sel);

cntr = .5 * [size(BW,2) size(BW,1)]; % Compute region distance to center of image
d = sqrt( sum( bsxfun(@minus,vertcat( st.Centroid ), cntr ).^2, 2 ) );

[mn idx] = min(d); % pick the region closest to center

res = false(size(BW)); 
res( st(idx).PixelIdxList ) = true; % the region outside the circle is 
                                      set to false, thus excluded

Note that in the code above, cntr = .5 * [size(BW,2) size(BW,1)]; assumes the circle is in the center of the whole image. You need to estimate the rough position of the circle in your case as a prior knowledge and change this line. 
Several assumptions mentioned above make the regionprops option more tricky than imfindcircles.

