Question about modded 360's
 

Can you change the theme like put the XBMC theme on it and can emulators be used when modded?

so far the only mod that can be done is hacked firmware for the dvd drive so you can play copied games the data still needs to be signed by microsoft so you can not run any homebrew code

whats the deal with xbl?
i heard it only MAY ban u
but not always?

At the moment, MS aren't banning for firmware related issues - and it's not yet known if they can detect a hacked firmware through XBL (as it's not known which commands the Southbridge can handle).

The only bannings currently taking place are for Gamerscore and paid Marketplace content abuse (using game saves downloaded with the game completed, so when you fire the game up, all acheivements are unlocked to your profile and effectively 'stolen' paid download content).