Ill chime in here too as I have been using the modded Xbox as THE defacto A/V solution for some time now (as I have previously mentioned)
Currently Im using the Xecuter 2.3B Lite Plus as my mod chip. This is a solderless chip that is pretty simple to install. I simply chose this chip over the other solder-required ones due to the fact that my solder skills are lack luster and that if I ever want to I can un-mod my box and still sell it as "retail".
There are lots of tutorials listed on
http://www.teamxecuter.com/ which is pretty much the site if you are using an Xecuter chip (rightfully so).
Im not going to retype all the tutorials here for you, but the long and short of it is that the modchips will come with a Cromwell (Linux) bios installed. To do anything, dare I say, useful with your chipped Xbox you will need to get a hold of one of the "illegal" bioses and flash the on-modchip bios to a new one. These can be found on IRC, newsgroups, Bit-Torrent etc, but likely will NOT be found on "legitimate" URLs as these bioses are illegal.
Once your bios is flashed you now can install a new dashboard (the gui). Most likely the one of interest on this email list would be the XBox Media Center (formally XBox Media Player). Again, for legality reasons you wont find it on any-old website...
The dashboards are all edited via .xml files and are pretty much intuitive and well documented with commented sections. There are screen shots of the XBMC in action on
www.xboxmediacenter.com. Its fully skinable so there are a few options out there for look and feel.
Full IMDB support for movies, album art for CDs, you name it and its in there. I have about 6 mapped drives to mine right now (minus 3 as my server blew up over the weekend thank you power brown-out). Regardless, its an amazing device that gets better and better as bugs are worked out and features are added (open source, near daily builds)
You would not likely need to add/change the default Xbox HD if you dont plan on playing "backed-up" games as music, videos, jpgs etc can all be streamed from a central home server.
Feel free to fire off any and all specific questions.