If you have made any modifications beyond cosmetic changes to your case, you might not want to connect your 360 to Xbox Live. You might get an unpleasant message from your friends at Microsoft.
It has been believed that those making firmware modifications were safe from the prying eyes of the software giant, but now that has changed. Apparently Microsoft is able to detect the presence of modifications to the Xbox 360 and is banning consoles from Xbox live.
It is no surprise that this comes around the same time as the Halo 3 beta. It is likely that Microsoft planned these two events near each other so that hackers wouldn't have time to produce a fix before the beta ended.
So if you get the message up on your screen, you can forget about ever connecting to Xbox Live from it again. Microsoft has stated that the offending consoles will be permanently banned, no questions asked. Your Xbox live account will still remain active. So as long a you drop a few hundred bucks on a new system, there won't be any hard feelings from Microsoft.
Modified Xbox 360 Consoles Now Banned From Xbox Live [via dailytech]