You can use DVD-R or CDR-W on Xbox to transfer files across.
However, I think you might be making too much trouble for yourself.
You have a Xenium Gold and therefore the excellent Xenium OS, which has a solid ftp transfer.
Get your PC hooked up to your Xbox (either through router or directly), get a free PC ftp program (or one of the free plugins for Firefox) and access just connect through that. You'll need the Xbox's IP address (which you can find on the Xenium OS) and the username and pass, unless you've changed them, should both be 'xbox'.
Once you're hooked up, you can pipe files across with ease. The Xenium OS will also let you add a larger HD (instructions on the OS, it's very straightforward).
I'm presuming you want to initially get the BIOS across. FTP will do that (xenium will happily look for BIOS from the Xbox HD) and you'll also be then set up to add dashboards and apps as you like by the same method.
Might I recommend you just install the XBMC, Xbox Media Center with the little shortcut file (packaged with it) that will let you use it as the alternative dashboard. It's simply the perfect launchpad for any app/emulator/file of any type and will make your Xbox a joy to use. The only addditional thing after that I'd add is some other dash (I use Avalaunch) just put away somewhere on the E: drive. Only reason it's there is if I want to move any of the XBMC files around, I obviously couldn't do that from within XBMC (or it'd crash, like any OS) so I just fire that up (from XBMC's file manager), do what I need to do, then reboot to XBMC. Easy.
Bot of a long reply, but I'll be happy to advise if you need any more info.
edit - oops, I had the previous replies collapsed, so yeah, seems we all agree