It might get worse.. clipped from Xboxhacker.net
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Well, guess what....MS DOES have mod chip detection on XBOX live. I'm a beta tester for 2 weeks now.
I have a Matrix, with ybox bios, blah blah.....all of a suddden today, i was unable to connect to live. After calling MS and checking the problem, I still coulnd't connect. I finally tried my other XBOX never modded - and guess what, it worked. Using the SAME NETWORK cable and all.
Wondering even more, i pulled the Matrix out and deleted evox off the hard drive. Guess what, STILL CAN'T CONNECT. They obvously block your serial number once it detects the mod.