well, the only way we can know is to have someone sign onto live with either a virgin upgraded HDD, or a stock HDD, and then (after many hours of Halo 2:)) switch to another STOCK (and only stock) HDD, and if they get banned, it's marriage, if not, it's upgraded HDD's. But again, I stress that i believe MS is not even checking HDD's until the GT is flagged as troublesome, maybe a modified xbox error, or negative feedback or anything, then they scan the HDD.
But I digress... who wants to switch to a stock HD just to get banned? kinda a lose lose....LOSE situation...naaamean?

It's not true that HD's are checked only if the GT is flagged. I had a clean GT when I got banned for upgraded HD, and I hadn't connected with the chip on.
coz think about it. your virgin xbox stuff up one day,a nd you send it back. tehy swap teh hdd,a nd giev it back to you. so by rights, you shoudl now get banned. but you havent done anything wrong....
So M$ would be able create this elaborate banning system but wouldn't be able to tie it in with the system used in their repair centres?