I know that the 360 does a massive sweep to people who Mod or have Jtag 360's in the begining of November (they have been doing this for about 3 years now and it is always in the begining of November). This sweep happens when you download and install the new update that comes out in the Begining of November (they also do this a week before a COD game comes out ironically).
We give credit to 3arc for creating the warning and permaban system now in place, but I believe parent company Activision was far more involved with this decision and attention than it is given credit. I think all the console makers were involved with the massive crack down on cheating we've seen in the last year, as well. The reason is very simple: without the crackdown, a massive class action was inevitable.
In any case, the current system of permabanning the account is all that is necessary. The hacks you had to worry about were the little punk kids that got on YouTube and found how-to's on hacking. Those kids are amature hackers and the proof is in the fact that they had to purchase accounts. Think back to Feb, Mar of this year when the forums were full of little kids wanting to know why they were banned. Xbox Live forums were full of queries as to "why have I been banned?", too. The parents of those little brats found out what was going on and refused to buy new subscriptions and the permaban system worked.
Pro hackers might bother with a video game now and then, but their talents aren't worried about getting the highest score in a COD game. No, the pro hackers are more interested in stealing millions of dollars from granma and grampa.
A warning or two is fine but the end result of anyone caught hacking or modding should always be an account ...
BTW ... those that do not think accounts - not ISP, but accounts - should be banned ... well, the reason you don't want a permaban is pretty obvious and its just a matter of time before the temptation bites your azz and you get banned, too.
I dont think you guys know this but Black Ops already has a banning policy in plae for modders and hackers.
They enforce it very well. The do ban people instantly for modding, hacking.
As for banning people across the board, it will never happen. Every case is dealt with individually. Just because some guy takes 8 shots to the head doesnt mean he is modding, he could have a very poor connection.
They do ban people for repetitive cheating or boosting in the game. Depending on the level of it they get a reset up to a ban depending the seriousness of the offense.
They will also be doing the same thing for MW3.
Good thing is as per modding and hacking the Gamertag in question will be passed on to Xbox Live where they will get banned permennetly from playing with that Gamertag. If they mod the console then they get console banned.
IP blocking will not work because IPs can always change.