Hey there, I don't want to sound harsh but there's really lots of tutorials and articels on xbox-scene.com.
I realize it's not easy to dig through all this information and of course I'll try to answer some of your questions, but most of them are also and better answered in those tutorials:
1) You need to flash TSOP first so you can put in a different HDD. Otherwise the box won't recognise the HDD, let alone boot from CD-RW/DVD-RW. So first thing to do is figure out how to flash TSOP (by readin the tutorials)
2) Basically there are is just one way, if you don't wanna buy a modchip that is:
You need to get either 007-Agent under Fire or Mechassault (original version). Then you need a modified savegame on a memory card, there's multiple ways to get it onto the card, again I have to refer to the tutorials.
You run the game, load the hacked savegame, and you machine will drop to evox or linux, depending on which hack you use. Both evox and linux can be used to flash the TSOP, after you soldered the correct points on the motherboard. Note that you _have_ to use linux if you want to flash a winbond TSOP.
3) It's always a good idea to do backups before you do any of those steps. E.g. save your bios to file using raincoat (a linux app), save your original HDD via FTP as soon as you get evox to run.
Sorry I lost track... after flashing TSOP everything else is a piece of cake: run your evox-CD, backup HDD to PC, remove original HDD, put in new one, run evox-install-cd (the one capable of partitioning and formating the HDD),
format new HDD, FTP back old HDD's content to new HDD.
You can then install evox or any dashboard of your choice via FTP.
Good luck, if you have specific questions make sure to check the tutorials for each step, it's not too hard since all that information is available (somewhere) on xbox-scene.com
Regards, Zak