im going to quote ROTTEN DEADITE from shack news:
"
Okay, look, maybe it means nothing, but here's my take:
If you wanna mod your Xbox, go right ahead. It's LEGAL, it's just a violation of your warranty. Just don't bitch when MS disables support for Live or whatever because, just as it's your system, it's their fucking product. And if they decide to stop letting everyone who owns an Xbox (large) controller to get onto Live, that's on them. 'Cause it's their product just as much as it's your property.
If and when MS arrests you for modding your Xbox, they're not arresting you for fucking with their system. They can only arrest you for piratating their games. Which is stealing, no matter how you look at it. If you own all the games you've copied, and only copied for backup purposes, you're in the right (and you could probably counter-sue them).
So go ahead and mod the shit out of your Xbox. It's legal. Shit, give it big flashing neon lights that say "Fuck MS" and teach it to swish around in a tu-tu for your friends. But don't act all high and mighty when you get in trouble for using it to play pirated games that you didn't pay for. And don't get all pissy when you can't get on Xbox Live either.
While we're on the subject, if someone mods their Xbox, MS finds out about it, and then sues them, the strongest leg MS'll have to stand on is if MS claims that the user violated the EULA, and the lawsuit is for a contract violation, not quite as an "illegal" thing as stealing or shooting someone. Contract violation is illegal to keep people from breaking promises. I think EULAs are shitty things to do to people (mostly because I don't think I should have to sign a contract for every little fucking piece of software I install).
"