i have 2 xbox running xbmc my older one has 2 fans one larger intake and a smaller one inside the box the smaller one is stuffed and makes loads of noise im going to get a replacement for it my question is does the xbox really need that second fan?

Yes, but only due to the small heat sink underneath it. If you can get a hold of the sink from a 1.1 - 1.6, which are regular sized, you could swap the heat sinks and rid yourself of the need for this fan.