It's very unlikely you would get banned, all it does is allow you to purchase more content from Microsoft.
Try the "Live" version linked to in the first post and inject it in to an Xbox 360 formatted USB memory stick, shouldn't have any problems with that.
Internally you can use any 2.5", externally just use the highest capacity drive you can afford. A 4TB external would be more than enough right...
The disc will not play like a normal game, you should just see XEX Menu in the games / demos section of the dashboard. You could try burning to a...
If I had to guess I'd say the PC is over heating or the graphics card is faulty. Try installing Open Hardware Monitor and taking a note of what...
Is the USB drive FAT32 formatted?
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