Reading the news about the Xbox Live fall update, and noticed in the comments someone saying they modded their 360 to play backup games. Yeah, "back up your games".... this is the biggest bullshit reason I've ever heard to hack your Xbox.
Never in the history of playing videogames on CD -- which is about 17 years for me, since I first fired up The Manhole to see what the CD-ROM hype was about -- have I ever messed up a CD or DVD based game where I couldn't play it anymore. The only time I've had disc errors, it's been the problem of the console or reader, not the disc itself.
So don't fool yourself if this is your excuse for modding your Xbox. You're doing it to do pirating of some sort. Either you're downloading copyrighted stuf on Torrent or you're hacking games on the console. Admit it.
On a side note, today HardOCP has an article about the Xbox Live Operations Center.