XBMC is awesome. I did a lot of modding back in the day, but I did only hardware, TSOP flashes, chips, etc. I was never a fan of softmods.
I actually use the windows version of XBMC on a HTPC since the original xbox doesn't have the power to handle high def.
The other thing you can do to avoid needing action replay is create a xbox usb to computer usb adapter. The xbox uses a standard usb cable, just with a different connector at the end. You can take the detachable end, cut it in half, strip the wires back and grab a standard usb wire you want to sacrifice, cut it open, strip the wires back, match the colors, twist them together and boom, you xbox controller plugs into your computer. You can then take a standard xbox memory card, plug it in to the controller and it should show up under windows as a flash drive. You may need drivers for the xbox controller, just google something called XBCD and install the latest. If you still can't see the card, it might require special drivers, I don't remember as it has been so long since I done this, but I think it should work right out of the box like any flash drive. Copy your hacked files and go on your merry way.
Also with that adapter and drivers you can use your xbox controller to play games on your computer, which is great for things like racing games, platformers, and emulators where a controller is more natural to use than a keyboard.