Good point, sectac, but it is funny you mention destroying your XBox or MS software. When you destroy any MS owned proeduct, you are released from the terms under the EULA

So that is covered too:

Termination. Without prejudice to any other rights,
Manufacturer or MS may cancel this EULA if you do not abide by
the terms and conditions contained herein. In such event, you
must destroy all copies of the SOFTWARE and all of its
component parts.
I am gonna attach the Windows EULA

Also, I have found user agreements for the XBox:

http://contracts.corporate.findlaw.c...000.11.28.html

http://www.theregister.co.uk/content/4/26995.html

You'll note that, presuming it didn't say that in any original Xbox EULA (we haven't got one, we don't know), this is a supplementary EULA which says modification and/or creation of derivative works from the hardware is forbidded. The probability right now is that Microsoft is just giving itself wide-ranging rights with a view to doing a fairly simple thing, i.e. stopping people using hacks and mods to steal stuff. It's also unlikely to be of concern to anybody who either doesn't want to use Xbox Live (or the Xbox as a console full stop), or who is using a mod chip you can switch off.
I'll call MS and ask where we can find a END USER EULA.