*sigh* This'll probably be the last time I say anything because I now most definitaly know what the problem is - having done the most radical thing I could do: purchasing another Xbox (Crystal edition), one that ain't modified. And guess what everyone? The game still won't work; it freezes at the exact same spot as before...
So there you have it, my copy of Steel Battalion is most likely damaged and so I am once again back at square 1 - only this time I know for sure that I'm not going anywhere because there's nothing more I can do other than get rid of this defect controller and try and find me another one (not going to happen).
This is ConraDargo, over and out...