I would happily send people my kit bit it is PAL and shipping to the US is nasty, if you are UK bound or near me at the time then let us speak (I also have a spare action replay).
To tie your questions together
TSOP is like a modchip but it is essentially a softmod otherwise (basically best of both worlds: nearly free and with all the benefits of a chip)
The main benefit of a chip (and so TSOP) is that you can stick any drive you like in there and it does not have to lock, locking is a somewhat obscure part of the IDE spec that some drive makers playing a bit fast and loose with specs do not implement. The hotswap guides hint at it but when the xbox is first booted the locked drive is checked, this is way before a typical softmod kicks in but as it is BIOS related and chips and TSOP flashing "replace" the BIOS.....
A guide none the less, I suggest you get a working softmod going first though:
http://forums.xbox-scene.com/index.php?showtopic=244043
The link above answers your custom linux question, it is not a full blown distro by any means and is very basic.
More tutorials:
http://www.xbox-scene.com/xbox-tutorials.php
edit: keys tends to refer the hdd locking key which you normally make when you are softmodding your xbox or you can dump with tools in the AID (autoinstaller deluxe) toolkit.
A note on EEPROM: the suggested method for softmodding usually involved protecting your EEPROM by using a fake one, you can check your dump is good by using liveinfo and the serial on the bottom of your xbox:
http://www.xbox-scene.com/xbox1data/sep/EE...kZENIaMcviF.php