you don't need a 'chip' at all. in fact, chips are NOT recommended for the XBox360, especially if you plan on using XBox Live etc.
moding the console is done through modifying the firmware inside the Xbox360's DVD-ROM drive which the basic idea is that you connect your PC's SATA cable to the XBox360's DVD-ROM drive and using the computer you modify the firmware and then it's moded.
http://xrl.us/be9yq8 (Jungle Flasher tutorial.... which is what alot of people use to mod there consoles. i personally prefer either Dosflash or iPrep. iPrep is easier for the average joe though although both (i.e. dosflash and iprep) are using dosflash)
that will get you started.