A new modified Xbox 360 DVD-drive firmware file claims that it not only is invisible to (previously reported) xbox live bannings but also some possible future methods of detection. It does warn, however, that you should "Use on Xbox Live at own risk."
I can't really envision a scenario in which I'd want to mod my 360 right now — I've modded consoles in the past to play import titles but you can count the number of Japan-exclusive 360 games on one hand. As for backing-up my game discs — I can count the number of disc-based 360 games I own with one hand, too.
via Gizmodo