I love my Modded XBox. Let me tell you my experiences. It's quite a story.
Believe it or not, I had absolutely no interest in an XBox at all for quite some time. I'd heard there were some really good games -- Halo, Ninja Gaiden, etc. -- but I really didn't feel like shelling out a bunch of cash for a system I'd probably play very little. Then I heard about the "solderless modchips" and I was intrigued. I started poking a bit more, and then I found out about all the wonderful things XBMC could do. It was really, really interesting, and I was tempted to do it, but I just couldn't justify the $200 cost for an XBox I very well might butcher in the process of attempting to mod it.
A few months later an ATOTer and I briefly discussed how he had, miracle of miracles, actually managed to get something from what would ostensably appear to be an online rewards system more challenging than squeezing blood from a stone. I will not, of course, mention the name as it would get me banned, just that the address for it contained the words "games", "free" and "video", and that it no longer is effectively possible to get anything out of it. Anyway, I did a little investigating of my own, laid out a plan and started completing offers, keeping obsessive-compulsive track of the deadlines associated with the "free" offers. 4 months and $40 later I had acquired enough credits to order an XBox. I added it to my cart, hit order and prayed it would work. "Oh well," I thought, "even if it's a scam at least I got all these dog treats (I own a cat), dietary suppliments (tasted like crap and half had stuff I'm allergic to in 'em), and the free Video Professor CD." (Speaks for itself why that was useless) But imagine my surprise when maybe 2 weeks later a large package arrives at my door containing an XBox! Huzzah! Excelsior! Et Cetera!
Anyway, I modded it with an Xecuter 2.3+ with Puyo-Pin adaptor, and it's been my best media buddy ever since. (I honestly don't know why people hate Puyo-Pins so much, because I've NEVER had a problem with my chip) First I had XBox Media Center as my dashboard, but once I discovered how to get a hold of some of the better games for XBox I switched to EvoX and started installing them to the hard drive. I've upgrade the drive 3 times, and filled it several times more than that.
As far as performance I really have to say the XBox can't be beat. For versatility anyway. It may only have a 733Mhz CPU and an anemic 64mb shared GeForce, but it outperforms any of my ghetto-HTPCs (laptops) with just as much video memory and faster CPUs. And now that I've acquired my Ghetto-HDTV (a 90s-era 29" Professional Display Monitor) I've discovered the joy of watching PAL movies and DVDs in native, raw, unconverted 25fps glory. Being able to play PAL game releases is also damn nice.
Now I won't say that the XBox isn't without its limitations. The build of XBMC I have installed is somewhat lacking on DVD-Video navigation, and there are some kinds of files it just doesn't really like. (Some MKVs, which I use for any of my encodes, screw it up hardcore or at least won't play with the overridden Aspect Ratio) If you're planning on playing back any 720p or 1080i content that's not in MPEG-2 format you might as well just give up now, because the processor AND the GPU can't handle it. For that you really want a true HTPC. Other than that though, I'm really happy with it. I have a feeling my XBox, much like my Dreamcast, is going to stay in the front of the entertainment center for years after its supposed era has ended.
On a related note, anybody know where I can get a good release of XBMC that I can use to upgrade my existing version without overwriting all my installed games/etc.? I used FF's X-Disk in the past but last I checked it can only reformat/reinstall, not upgrade.