Problems
1. Generally seen as piracy which is illegal. (Noone believes the region thing)
2. You are no longer allowed to used Live! (40% of the Xbox experience)
3. Lose your Warranty
It's just not worth it, check the flea markets if you want but I highly recommend that you don't do it....
PS: Which region locked game do you want to play so badly?
Hey, don't get the chip its pointless. And there is a way higher chance on fscking up your xbox.
Get your xbox dvd-rom flashed, works perfectly and works on LIVE, currently there is no way for microsoft to detect flashed drives on xbox LIVE due to an inclusion of "firmguard" in the new "hacked" firmware...