ok here we go, i'll give you some information, but be prepared for this to be a big post!
You can softhack an xbox using an action replay system, hacked mechassault/agent under fire/splinter cell game saves and an original copy (no game of the year or budget crap) of one of the games. Basically you download the hacked game save (the mechassault one can be found on the xbox linux site, the others you'll have to find yourself) of your choice, put it on the action replay, then copy it to your xbox hdd. Then you load the game (in this case i'll use mechasault as my example) select campaign, and then install linux. The xbox will be taken to the dashboard and it will install a version of linux which will replace "xbox live" with "linux" on the dashboard.
Now if you want to, you can install a full linux distribution (they can also be found on the xbox linux site). You download them and burn them to disc, insert them in the xbox and bingo, you get a full version of linux on your xbox. You can ftp to it if you wish, and you can put in bigger hard drive if you wish, you can also install alot of other software like xbox media centre etc etc. You can find more details of the software hacks at the following pages:
By the way if your xbox dashboard versin is above 57xx then you cannot perform the soft hack. You find this out by going to settings in the xbox and then system information, you'll see a line with something like
However you can do other softhacks which can be found at the xbox scene site, i just can't be bothered explaining them all!
If you can't solder (like me) and you don't want to pay someone for soldering an xbox modchip into your system then get and x-bit. There solderless and quite good, although they take a long time to flash.
They aren't all the same, the more expensive ones might offer things like less soldering or just some extra features (like 2mb of flash memory instead of 1) you may or may not use, all i know is that i wouldn't use half of the features on most chips.
The purpose of bigger flash memory is so that you can load on more bios is you wish and switch between them.
Any help? I'm tired now.