Yup. and I am 100% Glad they are banned. Microsoft has done A LOT to help gamers with the RROD problem (the number 1 reason to mod the box) and keep everyone legal, the number 2 reason is Theft, piracy, the number 3 - Control modding to give you that bit of edge over "normal" players.
Although the Nomad style modded controller is permitted and all - the mods I refer to are the "burst controller" and "rapid fire mod" - if your going to cheat, you will be caught and treated like a cheater, and modding your controller to give you the "perfect 3 shot burst fire" IS CHEATING.
Another rumor was the Fan Speeds being detected and banning live accounts for having "abnormally high fan speeds" since you would be required to go in- void warrenty- and modify the fan. - and since you were inside - who says you didn't do more to it?
Fact is fan speeds won't help the RROD problem - people "think" they will but the real RROD isn't "overheating" it's warping due to heating and cooling of the parts - something Microsoft overlooked in R&D. While "better vents" may HELP the problem - they won't cure it, especially if a box has already RROD before.
Just my input on this, since probably 90% of the bans were Legit -whiney kids that couldn't cut it in Halo or Modern Warefare and had to mod to get an advantage, or used pirated disc "backups". Good riddence. I have heard 0 reports about anyone "unlawfully banned" from this mass banning - one came close but he admitted to modding his controller- thinking it was "alright"]
And I used to fix 360s off ebay that RROD, typically they were $60 for console -sometimes you'd get a cool deal and snag a 20GB HDD or a Controller for free, or Audio/Vid cable and/or Power Brick - which made it a steal. Problem is broken 360s have a wide range of problems - RROD is basic description - if it's E74 your better off just getting an arcade then buying a Harddrive off Ebay for like $1 per GB. (roughly what they go for,unless collectors/special edition) honestly unless you use your Xbox as a media center (play your MP3s, watch movies, etc) the only thing you will really use a HDD for is Downloaded Content - if you are hardcore into 3 games you don't need a 120GB harddrive - since once you buy the DLC it's yours forever to download however many times you need, you can delete it from the drive and get another game's DLC on there while you play it. I make due with a 60GB but honestly I can drop down to a 20GB and not suffer at all.
Controllers are about $30 per (wireless) and some come brand new in package with batteries. $20 for a play and charge kit (cord and battery) very handy to save batts.
If your interested in buying a 360 - Get the new Arcade - newegg has em for 199.99 with free shipping. comes with wireless controller/a wired headset/ all the cables etc and the NEW chipset that is much better for combating the RROD. Plus an increased internal storage to like 512mb or something for your profiles and small things like save files.
and putting your game onto your harddrive has limited performance increases - and does NOT mean you can play without the disc in the drive, so its rather pointless. I notice no change in load times or action during Halo3 and other games with the game installed to my HDD vs just played off disc.
And if you have a USB thumb drive you can set it up (more then likely it's compatible) to hold your MP3's and small movies and plug it directly into the Xbox and they play just fine - so Harddrives on the 360 are overrated - unless you use the netflix download movie options on your xbox a lot and watch all the movies on it.