The keys are locked to an xbox and you need to program the drive with them; why every guide you read takes great pains to tell you to repeat the reading procedure to make sure you have no errors and then back it up to a drive, to a flash memory drive, email it to an offsite server and so on and so on. If you lose the key then your 360 becomes a poor DVD player and little else.
Older drives could read the serial with just a SATA cable and compatible card (people tend to stick with the VIA6421 line without official drivers although I did a liteon with my onboard NVIDIA the other day for giggles). The liteon prevented this but by building extra hardware we could read the key from the drive.
Reading the key was done quite some time ago which allowed people to grab the key and spoof an older model drive into working instead of a liteon but in December 2008 the liteon drive itself was hacked.
As you say once you have the key you do not need the extra hardware any longer (you can even read the key again if you need to update from a flashed drive without extra hardware).
The main difference between pre December 2008 guides and ones written/updated afterwards is that while the initial ones will take you through spoofing an older drive after having extracted your key the newer ones will guide you through flashing the firmware (amounts to using the key to make a hacked firmware, erasing the drive* using "liteon erase", power cycling the drive, flashing the new firmware)
More recently there have been reports of new model liteon drives (first reported in early June, build dates on the drives are April:
http://www.eurasia.nu/modules.php?name=New...le&sid=2406 ), some say they flash as normal while others say they can not be done and others have offered alternative points to use when reading the key. I am presently doing some research on the matter to try and sort this out but there is a good chance you do not have one of these unless you purchased it from a big box retailer in the last few weeks (even then I pulled apart one from a major high street electronics shop purchased on Saturday which was made in January).
You can make a device to read the key, I made one without soldering but the kit I used to make it is generally not found around the average house (it was just a breadboard, a handful of components and serial cable extension and to buy them in a shop would probably start adding up to prices near those for sending it off and/or buying one of the premade setups in):
http://forums.xbox-scene.com/index.php?showtopic=668247
You can grab the required voltages from anywhere (12V, 5V and 3.3V are common voltages inside a PC) and there is no need to solder anything to the drive board if that was your worry (the drive board carries those voltages though so people went and looked there).
*if you erased the drive and then try to power it again you may run into trouble as erasing the firmware also erases the internal logic which includes ejecting. No need to worry right away though as you simply need to put the drive back in "half open" mode (using the manual eject bar) if necessary and blindly write to the port you first detected the drive on (jungleflasher can do this out of the box, you may have to prod dosflash to do it).
