i found this curious limitation of fatx just recently...
if you have a file named with a space at the beginning of it. it wont delete with most xbox filemanagers or through ftp. the solution i found to delete this file was to rename it with first boxplorer (only boxplorer seemed to work, and beleive me i tried every other way first). not sure if this is why yr friend thinks he needs to format but it may help. and as stated you would really want to know your shit if formatting a softmodded box. i smell another modchip sale courtesy of mates format (IMG:
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