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While we've received confirmation that banned consoles are now able to reconnect to Xbox Live, we've yet to hear of anybody doing anything more than simply sign in (as in, play online or purchase content), so there's no word yet on whether these consoles are genuinely "un-banned" or whether they can now simply go one step further than they could previously go before being locked out.

Note that this applies to consoles that were banned for being modified, specifically with a flashed disc drive (not other means, like a "JTAG" mod). It does not apply for bans handed out to people being assholes over Xbox Live.

What's interesting here is the timing of the move, right in the middle of rival Sony's extended PSN outage. While some will no doubt point to this as the first signs of Microsoft's online security being compromised, it appears more likely it's part of the company's own internal testing, which is surely being kicked into overdrive in the wake of Sony's problems.
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