I realise there is a way of 'soft modding' the Xbox but this seemed more complicated to do; you needed a specific game to make a game save file, plus some kind of memory card device to get it all working, plus it seemed like you needed a PC to do it, though I could be very wrong on that (do tell me if I'm talking our of my rear end!).
To me the modchip seemed like the easier route, and wouldn't cost much more than gathering all the bits to do a soft mod. The price for the modchip, Xapter and postage was £33.52 - not bad I thought (especially as I'd sold a load of old junk on ebay the week before and suddenly had some spare cash!).
The Xapter is a clever device which enables you to fit the Xecutor without having to do any soldering, however, it is still quite tricky to fit due to the dreaded D0 wire. This is a fine copper wire coming from the side of the Xapter which needs to be pushed into the D0 hole on the motherboard of the Xbox. I have perfect eyesight but needed a magnifying glass to see the hole properly and had a nightmare trying to get the wire in. I spoke to Kanection and it doesn't actually need to go right into the hole, it just needs to make good contact with D0 so that the Xbox internal BIOS can be overridden. Kanection suggested I used a blob of Blu-Tak to hold the wire in place and this did the trick perfectly - the wire is held where it needs to be and is held in place well. I've moved my Xbox around quite a bit since fitting the chip with no problems so the wire must still be in the right place. Here's how mine looks, it ain't pretty but it works...
To work out what version of Xbox you have (mine was a 1.0) go here and follow the procedure. Note: If you have a 1.6 you need to order a different Xapter. To see what model of DVD drive you have go here.
The only other job to do before re-assembling the Xbox was to fit the modchip switchbank. The instructions say to pass it through a controller port and stick it to the front of the console, which is what I've half-done but I may well put the switch on the back of the console as I see no reason to turn the chip off (I don't use Xbox Live so can leave the chip working all the time). There is also a switch to turn on and off the BIOS flash protection which once you've flashed the BIOS you can turn on to prevent accidental flashing. I'm not sure what the 'Bank' switch does - if anyone knows do tell!
Update: I accidentally switched the bank switch to the other setting and the Xbox acted as if it was newly chipped, so I assume I can have 2 BIOS's installed and switch between them. No idea why I'd want to do that but it's there if needed. It panicked me at the time until I realised what I'd done!
Update 2: I've since fed the switch wiring out of the side of the Xbox instead which looks a bit neater.
Once that was all done and I'd taken the opportunity to blow all the dust out of the Xbox, I re-assembled it and tested the chip. Initially it didn't work and the Xbox wouldn't boot with the chip turned on, but it turned out I had't got the Xapter lined up quite right, so I adjusted that a fraction and it burst into life as it should :)
Don't forget - if you intend to use Xbox Live you must turn the chip off or you will be banned immediately!