Also according to sources "stealth mode" would work with the addition of a third party software that can be ran on the XBOX (that would force the XBOX to recognize the second BIOS).
But to say it would bypass current XBOX LIVE protection would not be saying much. If methods of bypassing the current XBLIVE security system were to go public (as there are methods even today, however our friendly groups do not want to release this information to the public or pursue it any further), MS would easily change it's current security system to adapt to new hacks. If the information were to be released to the public, they would no doubt be much more aggressive towards hackers (something the current groups don't want to encourage).
So don't get your hopes up when it comes to hacking XBLIVE, unless you would like to do it yourself. Current groups don't want to alarm the "giant."