XDK Launcher doesn't do squat. It's just a frontend to change settings and launch apps in E:\DEVKIT with. It's the BIOS that loads xbdm.dll and its the .dll that connects to the Xbox Neighborhood.
If you want the debug BIOS to load a different .xbe on boot, just edit the dashboard.xbx file found in the XDK with a hexeditor and put it in your E:\.
XDK is compatible with softmod, search this forum for softmod + XDK or try the guides.
