I don't have any experience with the X-Chip... actually, checking their website it seems that the chip hasn't been released yet so I suppose NOBODY has experience with it
I am supposing, however, that it will be very similar to the Matrix and Chameleon mods which are all the same type of mod. There are two types of mods for the Xbox. The no-solder ones and the ones you have to solder do not differe merely in how they connect but also where. If you wish to get Live, all modchips have a method to turn them off temporarily so you will not have any problems as long as you remember to turn them off before you launch Live. On the Matrix, you just hit eject once an original game is inserted and the LED on the front of the Xbox turns from green to orange to let you know that it is disabled and it's OK to get on Live.
I am sure the X-Chip will allow you to run XMC and all the software you've seen. The only thing these modchips do, really, is allow you to run code that has not been "signed" by Microsoft. $65 seems quite reasonable, I believe my Matrix was about that much when I bought it and I think it has been well worth it.
And about the legality, head88316, if only the DMCA were that nice. The DMCA is an extremely broad and vague law that makes illegal anything that *CAN* be used to circumvent copyright protection. This is why the deCSS code was such a big deal when all people wanted to do was play some movies on Linux. There was never any allegation that the creators or anyone using it was making illegal copies of movies, they simply cited that they put a protection there and deCSS could be used to undo it. In the StreamBoxVCR vs Sonic Blue case, they were determined to be violating the DMCA simply because they ignored *ONE BIT* that said "this is copyrighted". Under the DMCA, such an act is illegal. The modchip itself is illegal under the DMCA, purchasing it is illegal under the DMCA, installing it is illegal under the DMCA (oh yeah and of course it voids the warranty, I should have mentioned that...), etc...
The DMCA is Bad Law and will be struck down by the Supreme Court once someone has the money and cahones to take it that far. Streambox should have taken their case that far years ago since they had an iron clad argument behind them, but they wussed out and gave in and subsequently died a slow death after their main product became useless.
But like I said before, risk is small. If they want to take someone down, they will go after easybuy2000.com itself (and believe me, I am certain it is in the works since they have started producing these chips themselves, they will go the way of liksang.com and other businesses that did the same thing).
OtakuCODE