Correct, its only the altering of M$'s bios as this infringes their laws on reverse engineering. The purchase or sale of a non enabled chip is ok, as long as you dont alter that all important bios. I use my XB to play imported games, pirate ones never come with instructions which annoys me more than anything else (nothing to read on the loo) (LOL).

It is also possible to softmod an xbox without installing a chip or having any access to the XB's interior, you can legally use this to install linux on your machine.