This is one thing that I ask everyone that complains about the posting of "illegal" files and such. What makes them illegal? The fact that the mods or admins say so? This thread has cleared up a few things, but brought up more questions at the same time.
Earlier in this thread, when the MS Agreement was brought up, the only thing I could think of was "What MS Agreement? I didn't see or sign shit!" I don't believe that MS would have a case in hell if they were to take anyone to court over having a modded Xbox. Especially if thier only argument is the User Agreement. I can see if you are pirating games, but that is another bag of potatos.
I honestly think that all of the files needed to mod an Xbox should be out in the wide open for everyone to see. There isn't anything illegal about having those files, in my opinion, but backing up and selling games is illegal. If you are going to say "Well the code is based on MS's", so, who cares. Who's code is MS's code based off of. It is all a waterfall effect. And like I said before, I don't remember reading or signing any agreement that said I can't do whatever I want with my Xbox and the files located therein.