QUOTE(Martinchris23 @ Mar 18 2008, 04:10 PM)
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That's as maybe, but it's not illegal to do so.
Actually, it is: breach of contract is illegal, and has various civil remedies. If you've signed up for LIVE, the TOS is a contract that you are bound by.
Modifying the firmware of your drive is just as legal, and just as illegal, as modifying your 360's fan: it breaches one or more contracts you may (or may not) be bound by. Neither action, per se, infringes any copyright or patent.
But anyway, all this is beside the point: the reason Microsoft doesn't service opened 360's is in line with standard industry practices: if the box has been opened, there's no way of showing that the hardware inside is the hardware that was originally inside, and that it failed because of a manufacturing defect, and not because of the end-user fat-fingering it.
FWIW, DVD lens problems are a piece of piss to fix: just clean it with some IPA, and (if necessary) readjust the focus gain.
If I were offering a warranty on my repairs, I'd do both of these things to refurb drives before I sent them out, seeing as it takes less than five minutes of trained labour, and the only material required is a swab.