Xbox Live

No you wont get banned, I asked support, this was the conversation

Mark : Hello, thank you for contacting Xbox Customer Support. My name is Mark . Please give me a moment to review your question.

Jaime: ok thanks

Mark : Hey Jaime! So you have a question about a certain aspect of the Terms of Use, to get some clarification--is that correct?

Jaime: yes

Mark : I would be happy to assist you Jaime, by the way how are you doing today?

Jaime: im doing great, and you?

Mark : Doing really well, thanks Jaime!

Mark : So--what specifically would you like some clarification on?

Jaime: ok so the part of the agreement i have a question on is this

Jaime: "You may only access the Service with an Authorized Device or by logging into your account via the World Wide Web. You agree that: (i) you are using only authorized software and hardware to access the Service; (ii) your software and hardware have not been modified in any unauthorized way (e.g., through unauthorized repairs, unauthorized upgrades, or unauthorized downloads); and (iii) we have the right to send data, applications or other content to any software or hardware that you are using to access the Service for the express purpose of detecting an unauthorized modification. You must not attempt to disassemble, decompile, create derivative works of, reverse engineer, modify, further sublicense, distribute, or use for other purposes the Service, any game, application, or other content available or accessible through the Service, or any hardware associated with the Service or with an Authorized Device. If you do so, we may cancel your account and your ability to access the Service, and pursue other legal remedies. We may take any legal action we deems appropriate against users who violate our systems or network security, this contract or any additional terms incorporated or referenced in this contract. Such users may also incur criminal or civil liability."

Jaime: (i) you are using only authorized software and hardware to access the Service; (ii) your software and hardware have not been modified in any unauthorized way (e.g., through unauthorized repairs, unauthorized upgrades, or unauthorized downloads); basically this says, your xbox cannot be modded to access live You must not attempt to disassemble, decompile, create derivative works of, reverse engineer, modify, further sublicense, distribute, or use for other purposes the Service, any game, application, or other content available or accessible through the Service, or any hardware associated with the Service or with an Authorized Device.

I take it that this means that you cannout modify, decompile, etc. the things that are available on Live like modding games bought from the market place and stuff, correct?

Mark : You hit the nail on the head, Jaime. As part of the agreement of using XBox Live, you are not to modify the console or content that you have purchased, correct

Mark : The XBox Live Enforcement team is there to find and detect when that has been done, and when caught, it results in bans or suspensions depending on the severity

Jaime: can I can mod a file save of SINGLE PLAYER game, that has no affect on live services and is also not available service. I am not talking about anything that affects service like gamer score or anything available through market place or simply exists because it is dependant on the service. I simply want to change how my hair appearance is in the video game Mass Effect 2. The hair style cannot be bought in the market place, so I am not modding anything that can be acquired through live, also I do not need to access live to play mass effect, I simply want to change how my in game character looks which does nothing to the "service."

Jaime: can i be banned for that?

Jaime: or should i just get the PC version, since modding on a PC seems to have no reprecussions

Mark : If it is never used on XBox Live, you would likely not receive a ban for that, if it is only a character's appearance modded--I still have to say I wouldn't recommend using any kind of mod on your console, because mods can cause unexpected damage to a console

Mark : I would much more so recommend the PC version, yes

Jaime: ok thanks

Mark : You're most welcome Jaime! Anything else I can do for you today?

Jaime: just to clarify, knowing that it can damage my 360, I can play a single player campaign on Live and change my appearance without being banned since that character is not used in live, it only exists in the single player game?

Jaime: i mean, i can be connected to live, but it is not used for live

Mark : If that character is never used on XBox Live, correct

Jaime: but things like the xbox avatar i can be banned for since its live?

Mark : Yes, if your avatar is ever modded, you are correct, that would be an automatic suspension

Jaime: ok thanks, everythings been clarified

Mark : Excellent! Have a good night, Jaime!