You might still get the update request next time you play the game. You've updated the dashboard but there might be a game-specific update required before you can play. Put in your original game disc and apply the update if required.
As far as MS detecting your modified firmware, it is generally thought that they don't/can't check the firmware but instead ban consoles based on other factors such as using improperly made backups on LIVE. If you make your own backups using a Kreon drive or Samsung MS25/MS28 and Schtrom or XBC you should have no problems there.
The general consensus on modified firmware and LIVE is: playing originals while connected to LIVE is safe, playing backups while NOT connected to LIVE is safe (network cable unplugged), playing backups while connected to LIVE is risking a ban.
The level of risk and exactly HOW modified consoles are detected is the subject of endless debate, but if you always use the latest firmware and backups you make yourself, you've really done about all you can to minimize the risk of a ban.
If you are banned, however, it just means your Xbox cannot connect to LIVE, MS don't "lock up" your console. You will still be able to play all your originals and backups, just not on LIVE i.e. no online multiplayer. You will also still be able to apply game updates from game discs and dash updates by downloading from MS and burning onto disc as you have already done.
Hope that helps.
p.s. I think there is a 10 or 15 minute window for editing, doesn't matter that you left the site
This post has been edited by milamber: Dec 13 2007, 08:36 PM