Minor aside- most engineers should be able to play in other engineers worlds. I know there is something of a disconnect between fields on occasion (civil especially) but even so......
Yeah bans happen within hours of hitting live (dashboard is a different matter- you can sit on a dash for as long as you like)- you can block live (or even the entire box) at computer, router and possibly 360 level and leave system link (which can be done over the internet and as long as the client machine is a JTAG the host can even be stock). It is not the most reliable site (it had some false positives last year but
http://www.co-optimus.com/system/1/xbox_360.html has games with system link).
There is a USB loader method- only via JTAG though.
The other stuff
This possibly counts as partial USB loading- the 360 added the ability to use USB drives (albeit with a minor drawback of a 16 gig limit as far as what you can use goes) that can be used like any other bit of storage but it falls under the same restrictions as a stock 360.
Links
http://megacoolstuff.co.uk/FileFormat.html
http://www.free60.org/STFS
http://www.se7ensins.com/forums/topic/4008...ning-explained/ (a bit basic and misses some of the more exotic).
Long story short there is one major file type used by the 360 called STFS and a few variations on that theme (CON, LIVE and PIRS). LIVE is XBLA and DLC, CON is stuff like user data (saves, profiles, custom content made by the user) and PIRS is mainly for some of the game of the year type stuff (borderlands addon disc, fable GOTY, fallout 3 GOTY/addon apparently some mass effect and a bit more) but by no means all of it (many come with a code you can use to download it all and some run directly from disc (GTA lost and damned/ ballad of agy Tony disc).
LIVE is not able to be messed with per se (you can install it as a demo if you wanted mind) and there was the MW2 glitch that could trick some of it. You can also convert some of it to a CON format (annoying, "unreliable" in as much as it might not work for a given thing and this usually includes larger files and I do not know much about it as I have been spoiled by JTAG) although most do this with the aim of messing around with maps* rather than working around DLC and XBLA.
PIRS is what is used for the GOTY stuff (indeed having checked some PIRS stuff is no different to LIVE once you are past the header and stuff like that) and can be added to a hard drive without issue (normally it is left to the disc to install it but there is no difference between disc install and you copying it over to your hard drive).
*there is a further way of disc injection/swapping and abusing NXE installs but let us not go there.