I am more familiar with freeboot for some reason and I am not sure how closely such things match up. For now there should be no obvious menu differences- about the only thing I can think is try powering with the DVD drive ejected (for freeboot it will load xell).

You still need to flash the DVD if you want to go that route (DVD copies) but you have other options now, good news is you should be able to grab the keys via homebrew (or even change them to something else if you really want) so any "trouble" dumping them is now eliminated (flashing is a trivial matter). You might have already done it or at least have the ability to to do it: http://forums.xbox-scene.com/index.php?showtopic=697526 (not exactly what you want (it goes beyond that) but it will get the job done).

Good news with using such things is any sata drive will now work now (one of the many benefits for such an arrangement). Nothing should happen to your other 360 although I would not split use between such consoles if you are going to be doing anything like XBLA (not sure what detection they have in place but I imagine there will be some). If you are especially paranoid then you can wipe/backup the drive and restore it once you are done. Personally I would grab an old 20 gig drive and swap out the drive for something else (a quick scan says they are still somewhat pricey, there are replacement kits available but I would not suggest you mess with such things just yet).

The app of choice these days seems to be xexloader (xex is like exe but for the 360), http://www.xbins.org/nfo.php?file=xboxnfo1766.nfo is what you want here.

Good luck and keep us all informed, it looks like I am going to have to try and find an old 360 to play this game with over the next few days