Hi
Why dont you upload a bios to your C:\ folder of your xobx via the xeniums onboard ftp feature then flash that way, and if you cannot ftp try uploading a bios to a usb pen drive and insert it into your xbox and flash via that method.
Thats the reason you bought the best chip on the market is gives you all the features you need thats why you are given them because flashing by means of a media disc is just crap as you have found out, by far its one of the easiest chips to flash on the market, plug and play almost.
As has been pointed out to you already a flash on a bios even a 1meg in size one shouldnt take more than a few minutes at most. so i would agree that your xbox is NOT reading your media or it has not been burned in the correct manner so sadly for these issues you CANNOT blame the chip.
and yes due to the xbox's own onboard diagnostic feature it will give you an error if you try and bot with no hard drive plugged in.
Regards