OK, first there is a BIG difference between voiding your warranty and getting banned from Live. You can open your 360 up, smash the case into tiny pieces, replace the fans, reflow it in an oven, put screws in the heatsinks, and plug your DVD drive in with gold plated cords if you really wanted to, although this voids the warranty it is still an ordinary 360 to Xbox Live and will not be banned. However, if you use a DVD drive hacked firmware (often to allow playing of "backups" or pirated games burned to DVD+R discs) they can detect this software mod and ban your console.
You will not be banned from Live for opening your console. However, when you remove your DVD drive to get the motherboard out, do not connect to Live while your drive is not plugged in (they may detect that your console is missing a DVD drive and ban it, so always plug in your DVD drive when you are on Live...basically, don't plug in your Ethernet cable until you put it all back together and you will be fine). You can, however, turn on the 360 without the DVD drive if it is not connected to Live (you can run just the 360's motherboard by itself if you really wanted to).
As for cooling mods, I don't really think it's necessary. Do the X-Clamp replacement fix that I linked to in the previous thread. In my console I did it a bit differently. Instead of putting the screws through the metal case, I just put screws from the bottom of the motherboard, through washers, into heatsink. It lets you tighten it more without stressing the board.
Also, for the hard drive, you really don't need 120GB. The 20GB drive that it comes with is plenty unless you plan to go download crazy and buy all kinds of stuff online. All you really need is a 20GB hard drive, power supply, and HDMI console (if you already have an HDMI cord). Also beware that you'll have to use the HDMI cable for audio AND video, if you need optical audio for a surround sound receiver you have to get a special Microsoft cable that provides an optical audio output while you use HDMI for video.
Finally, if you plan on a total Franken360, you'll be in for some trouble. Microsoft pairs each DVD-ROM drive with a specific motherboard. Each motherboard has its own unique "key" that the firmware on the matching DVD-ROM drive also has. If you want to switch DVD drives, you must first find what your motherboard's key is and edit your new drive's firmware to match. This is a huge pain so most people recommend replacing damaged drives by buying another drive of the same type and swapping the circuit boards (just using the new drive's mechanism with your old drive's board). However, if your drive's circuit board is damaged you are stuck with the firmware hacks.
As for the HDD mod, it involves a Western Digital 120GB BEVS drive (
Newegg.com - Western Digital Scorpio WD1200BEVS 120GB 5400 RPM 8MB Cache SATA 1.5Gb/s Notebook Hard Drive - Laptop Hard Drives), a program called hddhackr, and I think a firmware binary from an official 360 hard drive (may have to be the 120GB's firmware, not sure). I haven't tried this mod so I don't know a whole lot about it, but if I ever need more room I have an extra 20GB HDD that I can mod.