I'm currently in the process of building an Xbox Linux distro thats a bit more up to date than most. I'm basing it off Xebian, using the 2.6 kernel and I hope to bring most of the packages in line with the current releases. RAM may be an issue, so it could end up needing the 128 meg mod, but I will see as the project goes forward EDIT: Looks like there may be too much of a gap between Etch and Squeeze. apt-get update fails when using the Squeeze repo's, and getting the 2.6 kernel to boot is proving a bit of an ass. Gentoo may be my tool of choice given that everything is compiled from source, may make life a bit easier
There were some people making an effort for the 2.6 kernel on Xbox, see here: http://www.emuxtras.net/forum/viewtopic.php?f=185&t=4460 I believe the OP is still active, but in lurk mode.
The problem is getting hold of old packages and code. I've never used Gentoo before, the installation seems pretty straight forward, unless you need files from 2006, then it becomes a nightmare. I've used Linux for bloody ages, ran it on everything, but given the nearly 10 year gap in development, I think Xbox Linux may be too far gone for me to get anything of use distributed. I've got Debian updated all the way to Etch with all dependencies satisfied for the default Xebian packages plus the usual web server and webmin doohickeys. I think I screwed up the 2.6 kernel installation by starting the process using one page on the old Xbox Linux site, and then finished using another page. Leaving 2 similar pages open at the same time was a bad idea.