Bungie will remove anyone playing HALO2 using a modded Xbox after a small update to the game today. This is in response to the tremendous amount of cheating that's been going on. In addition to the removal, the user will be banned from playing forever, and their stats will be removed from the leader board. I assume there's been a bit of outcry about this, but I personally have to respect a company that includes this in the FAQ: Q: Why didn't you give us any warning?
A: Actually we did, several times. For weeks. Also, we don't actually owe you any warning if you've been cheating. It serves you right. You don't deserve to play with skilled, fair, legitimate Halo 2 fans. Read the whole FAQ here.