EDIT:I updated with usb flash drive everything seems to work good,im connected to live,I haven't played online yet. My brothers console has dashboard 2.0.9199.0 and a flashed drive,it's not the latest firmware either. We are only using legit games and no burned games. Is it safe to update on xbox live?
What firmware do you have? depending on the firmware it can be detected by Microsoft even when playing legit games. Depending on the consoles DVD drive you will likely need to upgrade the firmware to play burned games that have AP2.5 enabled.
You will not get banned right away, you could be flagged now and banned months later. For certain "backups" now you need the LT+ firmware not LT, if you don't have LT+ you will fail the AP2.5 challenges and be flagged for a ban, i believe anything that console saves will also be corrupt on another console from then on (if flagged / banned) As your playing originals you should be fine, of course there is always a risk with any modded 360 going online.