- Another harddisk than the original
- Another EEPROM(flash) than the original
- Enabled modchip/eeprom

These are the reason the people got banned from XBL.
You can modify the console in any way including re-arranging its "architecture" so long as you don't replace any of it.

Mods like spacers; they lift parts of the interior up in order to allow for better airflow and thus greatly reduces the chances of RROD; are completely safe.

You can prevent the RROD by adding a fan which attaches to the back, and spacing the interior; both can be done by hand and materials cost like £12.

Chuck some christmas lights and bam, you saved a few hundred bucks (:
Now lets get goign to Amsterdam.