put a larger hard drive (i would love a 250GB drive in my XBOX mwahahahahaha) and ultra cables in (i cant remember if it is SATA or IDE, i think SATA but it does support the ultra cables, but M$ went the cheap way with crappy normal cables)
install your own dashoboard
set up a server and play HALO online
the list is enormous, as it is more like a PC than any other system before, and weve all spent the last 5-10 years hacking PCs, lol