I went to the computer fair yesterday and took my xbox along so I could get it chiped. I could have done it myself, but for the price they were charging it really wasnt worth the hastle.
I got a 120 gig hard drive (ibm deskstar) for £52 to replace the ickle 10 gig the xbox comes with and paid someone £30 to install a chip, the hard drive and program it.
Since then Ive "backed up" about 40 games. You just insert the disc and copy it to the hard drive! Best £83 Ive ever spent You can even FTP the xbox to your pc and upload games and software. Ive just been playing with a snes emulator, mario cart. Lol.
It does a couple of other things too, plays DivX movies, mp3's, vcds, photo albums....pretty cool really.
So if your thinking of having it done. I totaly recomend it.