This happened to one of my mates.. He reckons he probably managed to play a copied version of Forza before the release date - doh.

Banning users is never going to be an effective course of action - they'll just go buy another Xbox and mod that one too. Unless M$ think a banned user would go out and spend hundreds of pounds on all the games they previously had for free?

And then you could always keep your banned Xbox for copied games, and have a legit Xbox to play MW2 on Live.. Very few games are actually worth playing on Live - CoD being one of the games that is ONLY worth playing on Live.

And such a small proportion of users actually do the modding that the industry as a whole doesn't lose any significant amount of revenue on sales.