It is not modding the software at all.

It is copying an OFFICIAL MS HDDSS.BIN file and partitions over to a compatible hard drive to allow it to work with the 360.

As far as anyone can tell...INCLUDING when they run a console check (because it uses the official file) it is a MS 120GB HDD.

I have had this console (my SOLE console) on live for almost 12 months now. i'd think if there was a chance of a hardware ban i would've got one by now