Ever since Xbox Live came out officially, people who accessed Xbox Live with their modchip on were banned. Live detected the modified BIOS that was loaded, and the Xbox's EEPROM (the unique identity of each Xbox) was banned. However, their Xbox Live account was still safe. So, these banned users got a different EEPROM from various sources, and they were back onto Xbox Live. That has been the way for a long time, and was the way to get banned, unless you used a Xbox Live cheat or was a disruptive gamer.
However, until recently, it seems MS is taking extreme measures to stop people with modified Xboxes from accessing Xbox Live, even with their modchip off. It appears now that MS is banning modders who changed their HD from the way it was when their XBox was stock, to a larger HD or whatever. MS is detecting a change in the HD, and thus banning the Xbox. However, again, the modder's gamertag is fine, just that their Xbox is banned.
News source: Xbox-Scene
However, until recently, it seems MS is taking extreme measures to stop people with modified Xboxes from accessing Xbox Live, even with their modchip off. It appears now that MS is banning modders who changed their HD from the way it was when their XBox was stock, to a larger HD or whatever. MS is detecting a change in the HD, and thus banning the Xbox. However, again, the modder's gamertag is fine, just that their Xbox is banned.
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Ben Goodger has updated his Blog with some interesting stuff concerning the 1.0 release. Read the whole entry here.
This day has come a lot later than any of us originally planned, but that's the way software goes. I've learned a lot about a huge number of things in the process, have had the opportunity to talk to a lot of different people about their experiences with the software, etc. It's been a long road but we're finally here. No software is perfect, we did not fix every bug, implement every feature, but what we did do was create what we believe to be the best browser around. I want to thank you all again for the support over the past few years.
We also asked Ben what the progress was after 1.0 :
"After 1.0 we plan to resync our development work with the Mozilla trunk so that we can immediately pick up the great work that's been going on with Gecko since we've been away, continue our HIG compliance efforts for MacOS X, improve existing systems and plan for the next major release. The first interim release will be 1.1 in or around March 2005. ".

They don't stop you from modding.
Though they do have a right (under current law - not that I 100% agree with) to protect their intellectual property regarding the software on the Xbox. Those who develop homebrew software using an illegally obtained XDK know they are at fault when it comes to the law.
But as for Xbox Live... they ban you from Xbox Live because a modded Xbox would permit you to cheat.
That is plenty good reason for me. I even had an Xbox banned (was hooking up a new TV and couldn't see that it was connecting to Live). But I always knew it was a possibility and that it would be my fault if it did.
I bought another Xbox that is unmodded and I use that for games. The modded one is mostly for streaming videos from my desktop and those of my roommates.
Harsh
You can change the hard drive without getting banned.
But you need to put your stuff on a different partition (F or G).
It only bans you if you modify certain files that could potentially be used to cheat or exploit Xbox Live (like getting free premium add-ons).
so here are the options for everyone to pick...
you are:
a) a psychic
b) full of sh*t
c) a troll
d) b & c
so then the possesion of the 9/10 of that downloaded game(s) is quite illegal, and is why they try to stop this.
If you had an Xbox, regardless of version number, that was un-modded when you got XBL, and proceeded to mod it, then you're busted. If you modded your xbox before you got XBL, then you're in the clear. I believe MS registered your EEPROM and HDD serials when you got on XBL. Then, if ONE of them changed and one stayed the same, then you got banned because they'd know something was up. Furthermore, once you were banned, your EEPROM and HDD serials were banned that if you tried to use EITHER of them, then the that combination was also banned. Once a serial is banned, you cannot use it again. Period
An example for those who are lost:
Johnny buys an xbox. Johnny gets XBL. Johnny gets on XBL with his new xbox. Johnny decides, "I want to make backups of my games so they don't get ruined and only use my original retail copies for XBL." So Johnny gets his xbox modded with a huge hard drive. Unfortunately, Johnny's new harddrive serial doesn't match the stock harddrive serial that he used to get on XBL originally, yet his EEPROM serial is the same, so he's banned even tho he turned his modchip off.
Across town, Sally buys an xbox too, but she knows MS is screwing its customers. So she gets her xbox modded before she gets on XBL. Sally makes sure that her huge replacement harddrive is clean and any "additions" she makes to it are located on F drive. This may not matter at all, but Sally thinks it's safer. Sally signs up with XBL for the first time and now her EEPROM and HDD serials are recorded. She's safe and Johnny is out in the cold. Johnny's sad.
Xbox & Xbox Live are MS intellectual and technological rights and their products.
Think about it if anyone even tried to rip off XBL with a freeware version they would be shut down
Lindows anyone?
Sorry, didn't mean to reply to you.
That doesn't give you the full features of XBL (spoofs network play) and doesn't allow you to download game update/bonus features from Live.
You know why they are banning. You know why they don't want you to mod it. yet you pretend to be appalled by it. Just like downloading music without paying for it. Yet again, you become appalled when the RIAA starts suing people over it.
The number 1 reason to mod is to copy games illegally to your xbox. They know that, we know that, so why act like you all innocent over it? Yea, you can say that that isn't your intention but we all know the truth.
As far as I'm concerened, too bad for you
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