A modded controller is not considered fair because it give the user an unfair advantage. Using a modded controller is another form of cheating.
No
By using wires and computer chips.
Yes you can. You actually can get suspended for using a modded contoller on any game.
No, but you can get suspended from Xbox Live for using one.
I'm a Xbox Live Ambassador, and using a modded controller on the Xbox LIVE service violates the Xbox LIVE Terms of Use and will result in a suspension.
Its impossible to avoid as suspension if someone knows your using it they will file a complaint and you will be caught by the Xbox Live Policy Enforcement Team.
Could be a lifetime ban many are
Yes it will work, i have been using an xbox 360 controller on the newxbox 360S and it works the same.
of course
You might have been banned from Xbox Live for modding or using a modded controller etc, etc.
Only by modding a level/ using a modded level.