Just a small bump for anyone who cares how I got on.
I bought a chip (An X-ecuter 2.6CE) from Bald Bouncer for a smidge over £20. Great service, and the thing came the next day. So that was an example of a good shop. I would definitely recommend them. I tried to buy the chip from Kanection because it was cheaper (although with the postage added it was actually more expensive), and they charged my card and then sent me an email saying that it was out of stock and I'd have to wait a week :(. Anyway, in the end they refunded the money so it wasn't that bad.
So I got the chip and I was amazed at how small it was. Fitting it took ages because I wasn't really sure what I was doing, and the sodering is VERY fiddly. Took me the best part of yesterday afternoon to work out all the soldering and get that done, but now I know what to do, I could probably do it in about an hour tops. It's not too difficult to do if you're confident with a soldering iron - I tend to just go for stuff and worry about breaking it after. Some of the things you have to solder are VERY small, so if you are at all nervous about taking a soldering iron to your Xbox, leave it to someone else. So I fitted it and put it all back together, and it didn't work. Turns out I forgot to solder one one of the points (Y)
Anyway, once you've installed the chip, you can tell that it's working, but you need to download a bios for it from somewhere. Technically, these are illegal I think so they're very hard to find, as no-one will tell you where to find them. You have to use mIRC to find a server or something. There's a tutorial on Xbox-scene on how to use this. Once you have the bios, you have to convert it into other forms, and then use a program to package it correctly. In short, really f**king annoying. But there's loads of tutorials again on xbox scene, so once I had found the bios, there was no problem :o
Anyway, when you get the bios installed, you have to add a dashboard which is like the operating system. That was easy enough - you just burn it to a CD-RW or DVD (CD-R's don't work). And then here comes the clever bit - once you've installed that, you can connect the xbox up to your computer via the network and use some FTP software to just copy stuff across to the Xbox hard drive. VERY easy to do, and fast. So once you've copied the dashboard to the xbox's hard drive, it works without the CD and you can concentrate on installing the fun things. So far I've put on a SNES emulator and a Mega Drive emulator, and a few games. All on the xbox's disk. Very cool.
The other thing I installed was XBMC (Xbox media center), which is actually the best piece of software ever invented. Once I copied that across to the Xbox, you can access anything on your network. Music, Videos, Pictures etc. Just browse the network and find it. No setting up required. So now I can watch all my trials videos, and any other movies you may have "found" on the internet. It even plays DivX, .wma, .mov without having to download any codecs. Absolutely awsome. Oh, and it connects to the internet to tell you the weather :-
All in all it took me about a day to set the thing up. Not too difficult really, and definitely worth doing. Everyone who has an xbox should do it :)
P.S. Big thanks to Delusional who helped me out when I was stuck.
EDIT 20/08/05
I just installed a new hard drive in it, which is pretty easily done. They're just normal PC IDE hard drives. I used the old 120Gb out of my PC, and just whacked that in. Once it's in you have to make another boot disk with a formatting option, which formats the drive to the xbox filesystem. One you've done that, you can just basically copy everything over again onto the new hard drive in the same way as before (via FTP from my computer), only now there is loads more space.
Now all my trials and other videos are copied to the xbox itself, so I don't even have to have my PC on, which is good. Also, I downloaded a program called dvd2xbox which allows you to copy DVDs from the drive in the xbox directly onto the hard drive. I.e. games, if you want. So you can copy games to the hard drive so you don't have to use the disk, and they even load quicker too.
Apart from that, I've installed a couple of other homemade games which you can download for the xbox. They are pretty rubbish :P