No, modding isn't nearly the problem it used to be. Because if you sign on w/ mods (on halo 2 at least) you are banned 5 mins later, but the ban doesn't go into affect untill you sign off next. Now, the major thing is bridging and people *~trying~* to stand-by.... I say trying because all those people I encounter, it doesn't matter cause you see them trying to steal host to cheat, but those mofo's ain't gettin it cause I'm bridgin...
And, if you bridge, then you'll NEVER get faced up against other bridgers, and if you do, it's because they were retarded or they aren't at the moment, and they won't be able to do anything.
Bridging:
Having your xbox run thru the lan port on your comp via a crossover cable, then using an ip monitoring proggy to see other people's xbox'es ip's, then using a firewall program to either force host upon your other bridging friend, then they use the firewall program to block the ip's, thus kicking the people out of the game. So, you get matched up against a modder....boot their ass!
Stand-bying:
Pressing the stand-by button on your modem if you are host, forcing every1 but you into a blue screen, then you go around killing people, taking the flag, and whatnot
banwidth limiting:
very advanced and hard to do, it limits the bandwidth that your xbox gives the other people thus making it really laggy for them, but not you, so they are just walking into walls and such while you go and kill them or w/e.
Team stand-by:
by far my favorite, it's the same as stand-bying EXCEPT, that you use briding to stand-by, and your whole team has the stand-by, so the other team is walking into walls and such, then you and your team go around killing them or w/e.
Here's my list of the most popular cheating methods on halo2 on xbl from most to least:
1. Bridging
2. Stand-by
3. Modding
4. Team-stand-by
5. Bandwidth limiting
Now, both stand-by's can be detected by bungie, and you will get banned, and you get banned o so easily for team stand-by. Briding is an instant ban on the 360, but is undetectable on the xbox....the only way they'll find out is by feedback. Modding will allow you to get to level 50 (the most) but you get banned almost instantly, stand-by will not (get you to lvl 50) because you need a bridger to force you host, same w/ bridging and bandwidth limiting. The reason beeing, that it is very hard to find matches once you are a level 35+.....then you start boosting....
Boosting:
having you and your friends go into the game at the same time, (you can use bridging to make sure you get matched up against your friends) then you just take turns loosing and winning.....boosting by far is the least disruptive to other, innocent players because it does not affect them.