well if your are stupid enough to connect a modified xbox to xbox live with a pirated game you deserve to be banned for your stupidity! and as for the comment in the article referring to wanting to be able to back up their game however they want is a bit of a lie, thats only an excuse for make an copy of a game and using/selling that. you can install your games to the xbox 360 hard drive and run them from there. you should do this as it helps games load quicker and the console runs quicker.
Cheaters should be stoned to death!