I've been running XBMC on my modded original Xbox for around 5 years now, and I've used it nearly every day to watch shows like Hak5, as well as my ripped DVD backups. The XBMC project stopped supporting the old Xbox to focus on improving their media center software for desktop OS's. I understand why they ended support for the nearly decade old Xbox, but I use mine so often that I was glad to hear the XBMC4XBOX project released an updated version of the media center software.
I'm using a 1.0 model Xbox with an Xecuter3 modchip installed with a solderless adapter. I'm not sure they actually make those anymore, so if you want to mod your old Xbox look into a softmodding guide. The last release of XBMC for the original Xbox came out in 2009, and support for the Xbox by the project ended in 2010. The XBMC 9.04 release I had been running had a couple of issues involving plugins, so I wanted an updated version.
The upgrade went less smoothly than previous XBMC updates had, since I ran into some problems getting gftp to transfer the files over to my Xbox. I backed up the UserData folder onto my computer, then I renamed the XBMC4XBOX folder on my computer to XBMC to match the existing folder on the Xbox and switched to FileZilla for the upload. Once the old files were overwritten and I restored my UserData folder I rebooted the Xbox and all was well. Check the upgrade guide on the wiki if you need more info.
The first thing I noticed was the new selection of themes, including an Xbox optimized version of the Confluence theme. I considered switching to it from Project Mayhem 3, but I'm going to try out a bunch of different themes and see what I like best.
The benefits of upgrading to this release are the better support for streaming video sites and H264 video decoding speed improvements, as well as general bugfixes. H264 can be a pain to playback on the original Xbox. I used to use the plain MP4 RSS feeds for Revision3 content, but they seem to have transitioned over to H264 only, and on higher bitrate H264 the Xbox starts to drop frames. It's nice to see some optimizations for H264 decoding but there are definitely limits to what you can do with such old hardware.
The Navi-X plugin for XBMC is a nifty addon that makes it simpler to browse for streaming video sources and RSS feeds. I've been using it to watch Good Game, an Australian video game review show. It's probably the biggest addon for XBMC and it makes a lot of Boxee-style streaming video available.
Once my Xbox finally dies I'll most likely replace it with a Boxee Box to playback high definition video, which the original Xbox lacks the horsepower to decode. I'm also considering buying an Intel Atom + Nvidia Ion nettop like the Acer Revo, which would give me much more capability but at greater cost and complexity. It would be great for playing older games and especially emulators, which I don't believe the Boxee Box supports. Setting it all up might make a fun weekend project.
If you've got XBMC already setup on your modded Xbox there's no reason to avoid upgrading. It's quick and fairly painless. If you have an original Xbox just lying around collecting dust then softmodding it into a media playback machine is the best use for it, alongside running emulators.