it will re-load 250 if im right
Close. It'll update your cIOS249 to a newer version. One that doesn't play anything.
Here's the situation: games tend to do routine checks for the present IOS'es on the wii, comparing them with the ones on the disc. If even one is found to be older on the wii, it'll prompt that "there is a system update" message.
And that's the thing: there
is an official IOS249. One with a high version count, even. It just doesn't have any code (usually called a "stub"), so in practice, it'll just remove this softmod.
Priiloader is certainly the way to go. Otherwise, if you would update, it wouldn't play backups. And if you then reinstall the cIOS in slot 249*, Xenoblade will once again prompt that message.
*unless that has an even higher version...which the newer cIOS'es usually DO. So if you want, you may want to update those things.
When it says you should only install Priiloader on a Wii with unmodified iOS's, does that mean I shouldn't use it if I've installed several iOS's like d2x and all that?
Just a second...the rule of thumb is that "IOS" are the official, nintendo-provided things and cIOS are the customly made ones. IOS have numbers below 200 (except the stubs), cIOS'es usually above. cIOScorp/darkcorp is an excption: it overwrites ALL IOS'es with custom made ones to allow it to play backup discs from the disc channel. Unneeded for USB loaders and risky (your wii NEEDS your IOS, so messing with them has a risk). The latter is probably why priiloader doesn't want your IOS'es messed with: it cannot afford to screw up the installation, as that could brick your wii.