QUOTE(hellslave @ Mar 20 2012, 11:57 PM)
Total newb here... I get that the bigger board solders onto the 360 mobo, but where does that small piece go?
The small board, gets put outside your X360 case in some nice handy corner spot, so you can easier control the operation by the set of switches and see its LED status and more important update from your PC via the mini-usb jack.
This makes it very easy to reflash and update the core firmware without any soldering again or opening your X360 case up every time there is an needed update.