I believe it's possible to mod and still be able to be on Live, but you have to be careful, cuz lots of them get your console ID banned permanently from Live. And I think they are constantly trying to find more ways to detect if it's modded.
I know someone who bought a "broken" 360 on e-bay, looked up how to fix the issue, and used this one for modding. So, he actually has 2 360s, one he can use for online games, one for single player games.
__________________
The Big Lebowski
AKA Dramamine/Manny Calavera
|