I have UDE2 on my 1.6. When I used my stock HDD, everything ran without problems. When I put in an old 20GB HDD (formatted and locked with XboxHDM 1.9), Metal Slug 3 would no longer run on my HDD, or on disc. I cleared my caches (all 4 of them), deleted my saves, and it still didn't work. I read around and saw that when some E drives are formatted with XboxHDM, it prevents them from working, so I decided I need to reformat my E drive. I made an evox boot disc with the code to format E only, and for some reason, it wouldn't format my E drive. So I then tried with unleashX, and the same thing happened; it wouldn't format my E drive.
To this day, i still haven't gotten Metal Slug 3 to run on my Xbox HDD or from disc. All my other games run fine, but for some reason Metal Slug 3 doesn't.
I'm using FBL and the pblmetoo bios (Evox M8 with IGR and LBA48 (.06))
I'd say you don't really have to worry about too many games not working.