Only way
short answer:
yes.
Long answer:
The way 360 backups work is that the drive is left to check whether a disc is legit or not. The firmware is responsible for the check and can be changed on the earlier drives to allow copied games (which by design of commercial writing tools is not able to make a true copy). The firmware can also change read speed and a few other things but that is getting ahead of things.
In many cases this change can be made with common hardware for PCs.
The new drives however have a protection against being written to and as 360s have a unique key for each drive (hence the need to dump the key when flashing it and the reason you can not simply hook it up and replace it).
Chips alter the firmware (technically they provide a dummy firmware and/or subvert parts of it), flashing the drive alters the firmware. Flashing a new firmware being so simple means chips were dropped early on and have never really recovered (I would certainly not suggest a chip to anyone).
Really long answer:
http://uk.youtube.com/watch?v=uxjpmc8ZIxM
I trust ebay about as much as I trust wikipedia but assuming you get what is advertised yes you can flash it.
As far as I know you will need either a VIA card or you will have to take a soldering iron to the drive and disconnect a resistor. Have a look for "Textbook's Guide To Hacking The 360"
Note the site linked is the text below is down and there is no mention of the key being sent.