Zander: doubly agreed.
The Live 'Update' people see after using full games is, as far as I can tell so far, an executable update for that game itself. If you have a modchip, check the number of XBE files you have on your E: partition before and after such checks.
This is why the demo MotoGP updated when I first used it from the nonbeta Live, and why Whacked! didn't. It'd also be the reason why the 'update' was instantiated from different retail discs. This is what the code seems to say.
That update could result in a game with further modchip checks being run instead of the default.xbe it originally used.
I'm actually looking for the modchip check itself, I haven't found it yet. There are many many things it could look for, not just BIOS checksums.
But either way, so far, I can prove that Live games have the chance to update their own executable, and this can be run instead of their own default.xbe .