from a mod installer and homebrew creator of over 7 years,
i dont see why 500 $ cash for his modded console is a rip? if anyone here would care too mod it themselves be prepared to waste about 8 hours especially if your new to it, or pay someone else 50$-100$ for the mod.
Lol and with regards to warranty i work for BB and FS and can say that as long as the unit comes back in with all accessory's and the same serial number its warranty is still in tact. void is therefore just a myth at least within the largest retailer in Canada.
As far as online goes, M$ has not found a way to ban the media flag for burned games like they did on the Xbox for Live users, well at least they haven't found me, iv been using burnt COD3 since launch as well as NHL with no complaints, and omg guess what i got all those funky updates M$ demands i get before continuing online too, no way
in closing i guess im saying give they guy a break and consider it if you don't want to be a slave to the gaming industry, save yourself the money, for under 700 u can have a console with a hand full of games thats pretty sweet.