When using this exploit and xbox live what do i need to not be caught? I know legit games only on live. However how do i need to configure/use this to not be banned? I havent installed yet need to know how easy it is to go from modded to live first.

well easy. when the mod is active your live connection is blocked so you can't be banned. When mod is inactive (like when coldbooted retail disc or using the dual/tri retail boot) you will not be banned either.