Microsoft had previously banned people with modded chips inside their Xboxes from accessing the service.
But now, according to a popular forum, Microsoft has extended the ban to people who, rather than using the modded chips, have changed their hard drives.
According to this, forum, Microsoft can detect machines with changed hard drive and prevent them from accessing Xbox Live.
According to the forum, people's individual Xbox Live accounts are just fine - it's a modified machine that's bansheeshed.
There's a little confusion about what is exactly happening. Some people are concerned that Microsoft is scanning their hard drives. But the chief moderator of the forum thinks that if modchips are turned off, you won't have a problem. µ