i had my shit modded for a good year before i got banned from live. i didn't notice any system updates or anything...one day it worked, the next day i tried to play some halo and i couldn't log on to live.
i had the stealth patch, but like someone said, eventually microsoft figures it out and you get banned. i'm not really trippin i guess, cuz i still play my 360 all the time, and only pay a couple bucks for games...but i would definitely like to get some online action going...i've been considering buying a second console to play online.
anyway, yeah...it works, for a while...be careful though