I am interested in lighting up my xbox jewel with leds. However, my xbox resides atop one of my Bose 301 speakers and I am concerned about the removal of the sheilding. These speakers are not sheilded and the magnets cause discolorations in my large CRT monitor.

MS lined the xbox with metal for a reason. Just how big of a risk is it to remove the upper sheilding? Could it erase my hard drive? Will the emfs cause my xbox to function improperly?

i am not sure what other things it the shielding does but i do know that without on some occassions it will cause interference on the tv. as it happens to me constantly without any shielding at all...

Why not cut the shielding so ONLY the place where the LEDs will go is open?

Good call! That didn't occur to me.

i been having my xbox without shelding for like 2 year, and everythign is Ok.

I've just asked a similar question (without any answer yet). In regards to a magnet erasing your drive, I wouldn.t this is a potential risk. Check this link (a little down the page) and this.
My questions is what long-term effect a speaker magnet would have on your drive. I saw one post (here) where someone mentioned that a magnetic field from your speakers could "stress" your drive, and make it malfunction a lot sooner than ordinary. What is your experience with having your xbox on top of your speakers?

It has been up there (with sheilding) for 10 months without any problems. The speaker has an 8" woofer I think.