It seems Microsoft is finally cracking down on people with modded Xbox 360’s after letting them get away with it for almost a year. Basically, they are looking for any modded DVD-ROM drive so it does not matter what firmware you are using.
I’d say this is a good thing, and if you want to play on a universal system like live then you can’t screw around with the hardware you use to connect to it. I’m not making some moral statement here about using back-up copies, but if you break the terms and you get caught, you can’t really complain about it.
I wonder if this will convert anyone over to a PS3 as live is basically the main selling point of the Xbox 360. I guess it doesn’t matter if they were not paying for their games anyway 🙂