Well, he probably means a softmod, or tsop flash.
Softmod requires Mech Assult, Splinter Cell 1, or 007:AUF. Also an action replay or equivalent. Basically, you load up a hacked gamesave and it boots to evox. You can then install an exploit that loads a hacked bios off the HDD. After the bios is loaded, you basically have the same functionality as a standard xbox chip. Can never go on xbl as long as you have it set up.
TSOP flash is for v1-v1.5 xbox's. You need a hacked save like above, meaning an action replay (a another modded xbox with a standard memcard) is needed. You just flash the onboard bios. Read more about it:
http://www.fileforums.com/showthread.php?t=66038
Either case, if you already have a action replay or modded xbox+normal memcard, 007:AUF, then the whole thing should cost less than 5 dollars to do. That does not include labor.