
anyway, since I havent tried it I cant be 100% sure, but from what I have read
you do need to have a 'direct connection' of sorts from the pc to the xbox - you need to be on the same network as the xbox. so you can either run a crossover ethernet cable between the ehternet ports of the pc and xbox directly (not the same as regular patch ethernet cable) or you (i assume) can plug them into a hub or switch.
then you need to assign your pc the ip address or 192.168.0.(something other than 64)/255.255.255.0, and then telnet into the xbox. I dont believe it works without the telnet (as in, it wont work with a usb keyboard with xbox adapter plug)
now as to how to run homebrew code - the point I believe is that, now you have linux loaded. If you follow the procedure to solder the correct points on your xbox motherboard (this requires you to take the xbox apart and have a soldering iron, solder etc), then you can now follow the tutorial to flash your xbox's bios, with a hacked bios. once this is done, I assume you can now load unsigned software on your xbox by booting from the cd/dvd (this is the part I am not sure about, once you have flashed the bios, you no longer need to mess with the 007 savefile right?)