Activate.iso would probably be 1.6. Good for you as it means you should be able to dump the keys all in software.
As for playing new games kind of- a couple of days back we saw the first wave12 game (the new rugby game) which means it carries an update that reflashes the DVD firmware. Every game before that save for the AP2.5 titles will be playable using this method, what games will be using wave12 from here is a gamble- games out in other regions probably will use the older waves but I will not be surprised if dead island or Driver: San Francisco has it and as it has already appeared I will be quite surprised if Gears 3 does not have it (although it has been nearly complete for a while now- see the leaked beta athough I doubt they sat on the release a la bayonetta the other year) .
That method.... is pointlessly complex for day to day stuff. Obtain iso, send it through ABGX360 and make sure it says good to go, open imgburn or your chosen iso burning program and select the .dvd file (if it did not come with one ABGX360 will have made one), press burn. Stealth patching only really comes into it with AP2.5 and badly stealthed games (usually only p2p titles and dupes from p2p- sometimes p2p groups get games before the scene and some groups with scene access will stick it up for everybody else) although it is certainly worth knowing how to do.