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That's another problem (at least from my point of view). He wasn't a member of that development program; everything he was doing scraped directly from the Xbox.com webpages.. not exactly the most 'streamlined' way of doing things.
Magic comments bring magic prizes!
To reiterate, bans (of this nature) are per-console. Only that console cannot connect to the Xbox Live service. If you take your HDD/MU with your profile and content and stick it into an unaltered console, your profile will work. Your Xbox Live subscription is still active.

You may need to re-download content to re-auth it on the new machine (DRM - a separate argument, mind you), but none of your data is actually affected.

The point many people are missing (including HighFiveJesus above) is that Xbox Live is *not* the Xbox 360. It's a separate, additional service that Microsoft manages and has every right to control access to. These bans cover features that require Xbox Live in order to function, and therefore make sense that you can't use them on a now-unauthorized console. This does not affect your ability to play discs just like you did in 2005 when the console first launched.
If scratched discs are your only issue, use your favorite search engine to find 'dvd scratch protection' solutions. These things have been around for ages.
@Dummy00001 They aren't telling you what you can do with the console, they're telling you what kind of consoles are allowed on their managed network - to which they have a full right to dictate.

They're preventing these modified consoles from accessing the Xbox Live service, which is a completely separate part of the system and not inherently part of your purchase. People are saying that some offline functionality may break - as far as I know, only added features (such as install to disc) are disabled; the unit will still function as it did on Day 1 launch
Sounds like what you need is: http://dskin.com/
Thin plastic protectors that prevent scratches and don't interfere with the reading of the disc.
Regarding price, I navigated my way through their site enough to see that it's about $390:
http://www.talmo.com/home/shop/item.php?it_id=1244439915

According to Google, 448,000 Won is $388.86.

The scariest part is that if you check the site, there's some sort of product that you have to apply before using the Headtime. According to Babelfish's rough translation, it's 150 ml of 'dehairing prevention'.
Usually, you'd apply it to a game that just rehashes a popular theme or type of game without bringing anything new to the table. For example, any of the umpteen FPS' on the 360 that only exist on the fact that it's an FPS (which traditionally sell well on the 360) are 'me-too' games.
Considering FROM has published a few titles on the 360 already, I don't see any reason why they would pass up this interesting potential.

Quite frankly, the platform could really use a game like this to offset the number of 'me-too' games already available (Despite the irony that is a 'me-too' game in every sense of the phrase). At least it's a different genre of 'me-too'.
Thank you! A sane voice in a sea of unfounded knee-jerk reactions. I've been wanting to post this, as well, but always too late to the party.

"Third party" != "Unauthorized", and vice-versa. This does not prevent the sale/use of non-Microsoft memory units (Doesn't Nyko make one?), just ones that have been created by reverse-engineering.

I was going to say that this move could have been to 'stop' (read: at least mitigate) a lot of the alteration of data that happens with reverse-engineered units (which is *specifically* done by Datel), but it's probably more likely that they just want these companies to pony up for a license, so at least they make money from the idiots who can only feel good about themselves by cheating. ;)
Let the hive mind of Engadget get that for you.
"All of these new nettops have me intrigued. I'm looking for a small, quiet and cheap PC to replace my aging tower in my home office, and all it really needs to do is load Microsoft Office, check email and surf the web. Is there a particular nettop that's better (or a better value) than another? I know it's a rather new segment, but hopefully someone has taken a chance on one already. Thanks!"
 

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