Modded xbox = swapping out the harddrive for a larger one, switching out the Dvd drive for one that can read CD-r data, Play burnt copies of original games, play games saved to the hard drive, install programs like MP3 players, DIVX players, Upgrade the DashBoard to a customized picture...
Mainly playing copied games burnt on DVD-R discs...
Installing a jumper switch will still allow online play, by booting up to the original bios...