Don't listen to people that have no idea what they're talking about first of all.
You CANNOT flash your hard drive to play burned games you have to flash your CD drive. First you need to find out what type it is because different drives/boards require a different flashing process.
Second, You WILL not get banned from xbox live unless you play a game more than 7 days before it is released or it is not a verified game with stealth. You can find all of those stealthed games on abgx.net (aka abgx360 for the modding community)
I have modded more than 40 xboxes and probably 200+ red ring boxes its not hard but the first time will be. If you don't have a samsung drive chances are you should not try it. Samsung drive is THE hardest to ruin and the easiest to mod. If you have a newer box with a hitachi drive just give up on trying. You'll have to solder circuts replace a sata cord/power cord ect ect.
Lastly always remember...dual layer disks with a dual layer burner and never use any disk but verbatim or memorex.
http://www.xboxscene.com/