Mark -

I would actually suggest that you "really lucked out!" in this case.

I'll freely admit that I have modded many an Xbox using that chip. I would do this operation for coworkers in exchange for a season of Star Trek TNG on DVD. It was a fun trade to make. The mod itself is legal, however using a custom BIOS in the chip to bypass the Microsoft BIOS inside is considered illegal. It was therefore up to my peers to deal with the BIOS.

Advantages of a modchip aside for the moment, you should have an external switch board mounted to the Xbox somewhere that lets you enable or disable the Xecutor 2 chip. This switch is installed for the specific purpose of being able to get on Xbox Live without having your system detected as chipped. You'll know you were successful when you flip the switch, boot the Xbox and see the traditional "Microsoft" appear at the bottom of the screen.

As for the advantages of the chip, my original Xbox is still a major component of my home theater as it can play back just about any video file known to man. You can copy your Xbox games to the hard drive, and that makes for better load times as well as preservation of your DVD drive. You may want to keep your broken XBox for parts, by the way. Depending on when your units were made, your xbox that broke may have a superior DVD drive than the one you just picked up. That said, the modder may have upgraded the drive in there already. There were various models used during the Xbox lifespan. The net can tell you which ones are better.

It's a shame that the 360 doesn't have better backward compatibility. I hope your Xbox gaming lives on. Best of luck.