Quite simply,
MS will ban your xbox if:
There is a nonstandard bios running on your system, and/or any invalid *.xbe signatures in use. As simple as that.
How you get your xbox to boot a retail bios is another matter. IMO, the easist way is to use ldots 1.7.2 installer. Run the Uninstall option to go on LIVE.
When you want the UDE back, boot your exploited game, run the installer. You'll be running again very quickly.
For those griping about not having MA/007/SC/whatever:
You are making your xbox do wonderful things, WITHOUT A CHIP. It's not much of a stretch to get 1 of these games. Don't be cheap. If you have $50 to go on LIVE & buy games, get one of the above. It's a life-saver. I'm not being elitist. If you really can't/won't get one, then suffer the annoyance of the hot-swap.
Just my worthless .02