I take it people may be concerned about Team X and their fantastic work. Well, first off, just because Microsoft intends to "focus it's effort" doesn't mean they will have much success. Infact, it is a bold statement to target people that are mass-producing modifications...Does this include the pretty lights that you can install inside you new crystal box? I would say not.
So if thatis the case then what can be said about the X3, for instance. Well I may be wrong but the X3 is shipped with a legal BIOS for the purpose of modifying the Xbox to allow it to carry out additional "LEGAL" operations. Therefore MS would be hard pressed to make legal action stick on that point (Dependant on the laws of the country involved).
However, modifications are not just hardware. IN MY OPINION,this is where Team X may be a little vunerable with the BIOS's they produce. I am sure their legal eagles ensure that they remain inside the rules but this may be an area that they will, in the future, have to look at and maybe "distance themselves" in order to remain in business. Without spelling it out, this shouldnt really pose too many problems.
Relating this to the chips sold (certainly in the UK) for the PS2, they are now illegal to sell as they are simply a purchase and solder solution to enable the console to play pirated games.. What I mean is that they are programmed to carry out this task from the factory... I hope you can see the difference.
What Microsoft is "focusing on" is banning people from xlive because they are ASSUMING that the Xbox being used has been illegally modded. Again IN MY OPINION, this is where the legal problems will start (but for MS) as the first person who has paid to access the service and has modded their xboxes with LEGAL modifications and has been booted from xlive will have a real good case for kicking their arse. They are playing a dodgy game.
In short, we shouldnt start panicing yet... The biys know what they are doing ans I stress that this submittion is MY OPINION.