About the speculations on how MS actually does the bannings ... i believe the last thing MS wants is us to pinpoint the bannings to a specific thing or behavior. Behind this all there's maybe some very simple process/detection mechanisms, but the way MS is banning is to purposefully make them seem "random". They may even keep some sole survivors with old firmwares on purpose.
Also i don't think they ever would ban all of the modders even if they could. The modders are a community of typically hardcore xbox fans. Our word of mouth is worth more than any ad campaign so MS is, as i see it, just trying to keep things in balance. Eg. keep developers/publishers happy and the amount of (known) modded consoles to an acceptable level while at the same time not p...ing off the community (even if they don't endorse the modding).
Also, we drive hardware sales just a little. (IMG:
style_emoticons/default/wink.gif) Got banned? Get a new one! Fried your console while soldering? Get a new one! Bricked your drive while flashing? Get a new one! Currently the 360 is the only next-gen console that's easily moddable (Wii is hardly nextgen, has a different audience and has no software-only solution, don't know the status of PS3 modding but at any rate Blue-Ray burners and discs are hard to come by and are veeeery expensive).
totally agree with you on this, its good business sense from them as much as i h8 to say it, if they banned every modded console then a lot of ppl would be put off buying a 360 but if they do it bit by bit most of them ppl will buy another 1 thinking other ppl have got away without being banned maybe i wont this time, thier timing is great with the key xmas shopping time, come january thier sales figures over xmas will only b helped by some of those who were banned in nov getting a new shiny 360 to mod