There's some DLC and XBLA games that work on retail units as they're DRM free packages.
Usually GOTY releases can have their DLC containers stripped and put on a retail console.
For anything else (Avatar items being one of them) you need a JTAG/RGH unit.
There's no softmod for the 360, you'll have to solder in a chip yourself or have it get RGH'd.