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[esdubu]

A few people have been suggesting that they are getting the error message about modified hardware before their xbox has a chance to connect to xbox live. This would suggest that there is some locally stored information preventing connection to the service. I've had a read through the EULA for xbox live and this is a direct quote "...or discontinue any functionality or feature of xbox live or any game from time to time without notice, which may involve the automatic download of related software directly to your Xbox video game console, and which software may prevent your xbox from accessing Xbox Live

This clause would seem to substantiate these claims. Hope this information can be useful. And sorry for creating a new thread for this, I was afraid the info would get lost in the massive threads that are already dealing with this problem.