Just recently we had a massive ban of 12 thousand users of Modern Warfare 2 purchased through Steam. Now, while these bans were accidental the following ones are most definitely not.
Now the question is, are you safe? If you actually purchase your games like youre supposed to, then yes you are. Microsoft is making it very clear that they do not want 360 owners pirating their games. Its time that Microsoft brings the hammer down. As you may or may not know, there will be a dashboard update on November 4th to make the console compatible with the incredibly hyped Kinect.
Any users that have a flashed DVD drive to play burned games will have their consoles banned. The way this will be done is during the update, it will check the firmware version of the drive. If it does not meet the current version, your beautiful flashed 360 will be no longer of service to you. If you have the undetectable iXtreme LT firmware, then you are no longer safe as it is now detectable.
The only way you will be able to keep your 360 from being banned is to NOT download the update. Either way you wont be able to play online. At least if you dont update it you can still play your burnt games offline. You shouldnt be pirating them anyways, but thats your choice not mine