And that's how you deny your own theory. I know people in Poland who bought their Xboxes in Germany and guess what... They did not get banned

. M$ has no right to do it. What if I move from Denmark to England? Should I get banned for it? M$ HAS NO RIGHT to ban people for reasons that may be illegal and not fair. M$ doesn't allow any modification of the Xbox. They can't prohibit changing the adress. EVERY theory that can be disputed because of its illegality, even by a smallest doubt, can not be implemented. Xbox can be a M$' machine, they have written some rules about the Xbox Live and it's only our fault if we don't keep them.
Just think this way: If M$ saves hdd's s/n and EEPROM data it's extremely easy to check if the Xbox was ever modded (if ever banned first). Remember, that M$ actually DOES NOT allow any hardware modifiaction of your console, if you want to play on XBL. What I mean is: when you had been playing on XBL on stock hdd and after few months you have decided to change the HDD and continue XBL, you're banned. Why? M$ gets the hdds s/n and EEPROM as soon as you connect to the XBL, if the EEPROM is ok, but the HDD has a different s/n than last time, it means that the Xbox was modded. And so on- if the Xbox has different EEPROM and the same HDD as (theoreticaly) another Xbox had before, it's being banned again. Now banning means ban to the EEPROM and to the HDD. But it's nothing proved yet. I hope it won't take much time.
Try to remember it: Every theory, which can disputed for legal reasons, can not be implemented as a term of Xbox Live... because it would be illegal, duh.
Though... We all know that when we have bought an Xbox we should be the only ones who has the right to do what we want with it. But because "modding" means a possibility to launch illegal software (in case of consoles), it's in most cases illegal. And that's what M$ is fighting this way. You can add 100 LEDs (stupid- but it's also illegal) to an Xbox and you won't get banned until you will start modding the integral parts of Xbox- data and devices which store data- cause only this can be checked remotely. They have to figure out some inteligent screws for their next console xD.
When you remove the first sticker from the Xbox, there's a possibility that you will also use illegal software- that's why M$ doesn't allow any modification, but DOES give you a good service and warranty for their product instead of homebrew software.