As heimdall says softmods have to have the dvd player, or atleast a pcb from one connected to boot.
if you can tsop flash the system or use a chip then you can boot with no dvd.
this is because the xbox boots the stock bios untill a sertain point then the softmod loads the modified bios. This lets you be softmoded, but because it has to boot the stock bios to even get to the softmoded files if you dont have a dvd player you will error 12 and wont get to the softmod part.
regarding error 12 though
i have a 1.6 board thats just as stupid..
It error 12's if you use a phillips dvd drive in it, All others work fine though.
and all the phillips drive's / pcb's work in all other xboxes.
the 1.6 came to me dead some 1 had put it in the wrong case. so i had to replace the collector.
Im not sure what the reall issue with it is, so i just use a sammy in it now. But im thinking the phillips draws more power and prehaps i used the wrong collector.
any way im using it as a emulation system downstairs so it dosent need to work any better than it does, its just really strange.
just thought id point out that so far out of close to 100 xboxes now i have found 1 xbox that will error 12 if you use a phillips drive. and it is a 1.6b