I've been looking into it further now...
from what I've gathered, when signing on, the Xbox contacts MACS.xboxlive.com (MS Arbitration Control Server/Service?) and performs functions like reporting suspicious info (what exactly that entails... I intend to look into) and another similarly interesting looking one is ArbitrationReportInternal().
now, does anyone know if all Xonline libraries and functions are static in the XBE's themselves, or there are libs inside the Xbox.