It's a fairly simple mod and as I had to do 2 of them today I thought I'd knock together a guide as all the other ones I can find seem to give dubious information so this is what works for me...
What do I need?
An 80mm fan, I always go for the Xilence ones which you can pick up cheaply (either the standard black or redwing - there doesn't seem to be any difference in noise levels between them, just a different colour).
A pair of snips (or a dremel will do the job).
Something to cut through plastic, you could use a dremel, a junior hacksaw or what I use which is a JML Exakt Saw.
Step 1:
Take the fan out of it's packaging and cut around the bottom two corners so you have two little plastic bits poking out like the picture below. Before cutting you want to make sure the fan will be blowing out of the machine and not into it (there should be a little arrow on the fan somewhere telling you which way it's blowing).
Step 2:
Open up the xbox and take everything out (HDD, DVD Rom, motherboard, power board and game controller ports) so you should now be left with something like the picture below. To remove the fan you have to get a screwdriver down the side and prize open the clips at the bottom - it will then release when you pull upwards. If you accidentally break these clips don't worry it's not the end of the world.
Step 3:
Carefully prize out the RF Shielding and once out get your snips and cut the mesh out from behind the fan.
Step 4:
Now tidy up the rough edges and bend the metal outwards slightly (so the fan doesn't clip it otherwise it will make a very annoying noise!).
Step 5:
Carefully put the RF Shielding back in place making sure it's properly in place - you'll know if you've got it in properly by looking at the bit behind the power button - if the holes in the shielding don't match up with the solder points you know it's still not quite in place. Now screw the motherboard, power board and DVD ROM back in BUT NOT HDD CADDY. It should now look like this:
Step 6:
If you managed to not break the clips for the fan you should be able to clip the new fan in place as shown below, if you broke them not to worry we'll get to that in a minute - for now just slot it in place.
Step 7:
Time for some ties... Whether you broke your clips or not this is still worthwhile doing as it pulls the fan down flush with the casing and helps the fan move more freely. The one shown below is clipped into the original clips so I only need one tie but if you broke them then use 2 ties - just stick them through the top holes and tie them onto the holes either side of where the mesh used to be.
Step 8:
Now it's time to cut the HDD caddy with your junior hacksaw/dremel or whatever you have that will cur through plastic. Make sure you remove your HDD from the caddy before doing this - you don't want bits of plastic in there! You need to cut along the line above the warning sign and stop just after - if you want it perfect just measure up against your fan to see exactly where to cut.
Step 9:
Now you have the HDD caddy all ready you can stick it back in and screw it all back together. Once all screwed back in place check to make sure the fan is actually rotating - if it isn't switch off the xbox and take out the 2 screws nearest the fan. Now switch back on again and start with the middle screw and tighten until you hear the fan clipping something, then loosen until it's free again and then do the same with the other screw. It's a tight fit and you want it to be tight but occasionally this problem will occur so either use this method or open her back up again and fiddle about with some filing. The finished product should look something like this:
