For everyone asking, here is the current situation regarding the 360 bans:
1) Once banned, the only solution is to buy a new console to be unbanned - all modded consoles with iXtreme 1.61 and below will be banned if you go on live
2) Once banned, you will not be able to use certain media features, play games from the hdd, and if you bring your harddrive to an unbanned 360, your existing save data will be corrupted
3) A new firmware is being worked on which will avoid bans, playing offline until then is suggested
4) For more news and updates on the situation, keep an eye on www.xbox-scene.com