Tips on playing burned Xbox 360 games WITHOUT getting banned.

Prerequisites: 

Torx size 9 or 10 screwdriver
Small flathead screwdriver
A thing, strong, and preferably pointy object (In my case I used a small pocket knife) for use on the rear case clips.
The most recent version of iXtreme. (At the writing of this guide, the most recent version is LT+ 1.1 for all drives except Samsung, which is only at LT 1.0 as that drive cannot utilize Microsoft's AP25 security check.)
A method of powering a Xbox 360 drive outside of using the 360 itself.
A certain amount of cautiousness.

Note: This is a work in progress. Currently I have not put instructions on flashing the DVD drive itself up yet, but will do so for BenQ drives shortly. (If anybody wishes to contribute information about flashing other drives models, I will be glad to add it in and appropriately credit contributors for their assistance.)

Opening up a regular Xbox 360:

Before flashing the DVD drive's firmware, access is needed to it. With that in mind, it will be necessary to open the console to get access to the drive itself. I will state upfront that doing this will outright void the warranty on the console once and for all and that this tutorial cannot be held responsible for anything that may go wrong. Now that I have that out of the way, here's how to open the console.

First, the faceplate has to be removed from the console. I usually do this by hooking my finger or thumb on the top of the usb port door when the 360 is stood rightside up. For most faceplates this should come off easily, for some tighter faceplates (like some of the custom faceplates) a bit more force may be needed, but make sure to be careful. Once that is removed, make sure to unplug the hard drive from the 360 so that the bottom grill can be removed. (Note: I know that may seem redundant to mention, but there may be some people who don't realize they need to do that.)

Next to remove are the top and bottom grills, which are held in by six clips on the sides. The first two on the top grill come off easily, but the remaining four will have to be pushed through by a small flathead screwdriver to release the clips. Usually, the clips can be seen if held up to the light. For the bottom grill, the rubber foot towards the back will have to be removed temporarily to reveal the small hole where the clip can be accessed. Make sure to be careful when removing the grill so that the clips are not damaged.

From here, the front and back case clips will have to be removed. For the three front case clips, a fingernail or screwdriver can be used to undo these clips. Once they are undone, the top half of the case can be lifted up, but make sure to keep it apart as it will clip back into place. For the back case clips, a small pocket knife or small flathead screwdriver will be needed to undo the clip. One issue is that the back case clips can only be access through small slits so use force until a clicking sound is heard which is the clip being released. Make sure to keep these parts separate like the front so that they do not clip back into place. Once this is done open up the case and the top of the metal case holding the hardware should be exposed.

To open up the metal case so that the DVD drive can be access, six of the screws have to be unscrewed with a size 9 or 10 torx screwdriver. The screws that have to be unscrewed can be seen below in this picture from Llamma.com:

From this point, the top can be pulled off and the drive should be in sight. Make sure to unplug the power supply and sata cable from the drive, and unhook the eject button before removing the DVD drive. Last, but definitely not least, when removing the drive, make sure to do it straight up due to how it is slotted into the 360. From this point the drive can be plugged into a PC using an SATA cable. However, in order to be able to flash the drive correctly the PC must have either a VIA based SATA chipset, an Nforce based SATA chipset, or a solution such as the Xecuter X360 USB PRO which has SATA chipset that works with 360 drives. Currently, I have no knowledge of other SATA chipsets working with flashing 360 DVD drives. Furthermore, a method of powering the drive is required which is made difficult as the 360 uses a non-standard chipset for powering the drive. Either a converter cable will have to be made or a connectivity kit such as one of the Xecuter CK3 solutions or the X360 USB PRO can be used. A 360 can be used to power the DVD drive if need be, but make sure to have video output unplugged when doing this. Also, when using this solution be aware that powering the drive like this is logged now and while it has not result in anybody being banned from Xbox Live, I personally recommend against this.

(Flashing the 360 drive to be documented shortly.)

Tips on staying unbanned:

With the recent changes in Microsoft's Dashboard, the introduction of AP25, and the planned introduction of the new XGD3 disc format, more caution is needed than ever when it comes to playing burned games on an Xbox while avoiding the risk of getting banned from live. While iXtreme has worked its hardest to keep on top of things, the basic reality is that it is not an all encompassing solution. Unfortunately, there are some who often do not know that when changing a console's DVD firmware so it can play burned games, they have to be careful or they will have their console flagged and banned should it go online in the midst of a ban wave. As a result, I'm going to talk about the precautions that should be taken when a console is modded.

First, before even before modifying the console, make sure that the dashboard up to date. The reason for this is that updating a console with a flashed drive directly through live will flag the console for banning. When it is time to update the dashboard, switch the DVD drive back to stock firmware when it's time to update, then re-flash the console with iXtreme. I will mention upfront that this will become a even bigger priority as the planned Spring 2011 Dashboard Update has been strongly rumored to revert drives back to stock firmware, null the drive key (hope everybody has backups of their old firmware and drive key), and may also flag the console.

Another suggestion is to avoid playing backups of games on Live at all costs. I know this may be a unpopular suggestion, but there is no such thing as being too cautious in this case. If the game has to be played on live extensively, bite the bullet and buy it when the opportunity arises.

The one thing to watch for is when Microsoft starts a ban wave, which is usually mentioned on various gaming sites and forums that discuss iXtreme. For individuals who believe that they may have a flagged console, avoid live like the plague during these periods. Even if the console isn't flagged, the best suggestion is to practice extreme caution when going on Live during a ban wave. (I know some people who won't go on at all during these periods.) It's better to miss out on a bit of online capability than to lose it altogether.

These tips can make a difference when it comes to accessing Xbox live. I've seen plenty of people who don't take any precautions thinking it won't happen to them and the end result was a banned console. I've also seen others who ended up with a banned console simply cause they didn't know that they had to take some precautions. The reality is though that following these basic guidelines can mean the difference between staying on Xbox Live, and having to buy a new 360 to get back on.

Note: Should anybody be interested in seeing additional information, I will be glad to put it in if it is not common knowledge.

Special Thanks:
Cisc0ninja, RaT, Jungleflashers, (for making an awesome guide for their software), and Llamma.com. (I linked to one of their pictures to show the layout of screws so it's the least I could do.)