1- softmod + XDK works, search the dev forum
2- eeprom isn't modified unless you act before you read like a guy did a week or so ago (free hint: don't install from cd)
3- latest version of XDK needs VS.NET
4- making in-game movies with debug bios is overrated, try a capture card
5- for games that use up all 64mb RAM you need to solder in an additional 64mb for debug, which can't be done on a 1.6