XBMC4Xbox

Excellent
Is it still greyscale?
I think you end up with unleashx as your dashboard after softmodding it with XBOXHDM, but I'm not 100% sure.
I'd recommend doing the TSOP mod if you're handy with a soldering iron? Makes things like putting in a bigger hard drive a lot easier.
You can always install xbmc by burning it to a disc(assuming the disc drive is working). But if you're just looking to play games its not really needed, although it is a very nice interface

The grey color was related to a particular tv, my other tv it's color. I was able to install the coin ops 5 lite install, which from some reading seemed like a good idea due to the small 8 gig harddrive. I have to find some used/cheap controllers at this point. I'm guessing it's because of the 'older' games, but wonder if there is anything I can do/tweak to make the quality a little better. I'd also like to maybe choose a few later games to install, but don't know if I need 'another' emulator package or if I can use the coinops package and just add to that. The package does come with like 300 games, it's like walking into an Arcade again from back 20 years ago. ha ha.

If you get some component cables the xbox can output 720p through them, a quick google says coinops supports that. I've never used coinops myself so I can't really help you there, but some component cables are definitely worth it for xbmc