It all depends on what you want....I had an extra old white xbox sitting in my garage so I just sent that to him and the dude modded it. But the website is www.texasmods.org
It'll run you through all the prices there.
No they're fine...you can play them online before/after if you want. I just choose not to. There is a particular way you have to burn the disc to ensure it gets all of the data onto it properly. I play online with it once in a while, not very often. Stuff like Madden, Call Of Duty and whatnot I will but I basically just use it to try out games and then if I actually like them, I'll buy them and play on my slim.
Recently Microsoft came out with a fix that stopped modding of games for a few weeks. DVDR-DL discs cap out at like 8.7 GB. So Microsoft started writing their newer games with a 8.71 size. Now the modding community has figured out a way to flash your DVDR burner so that you can burn that extra 100MB layer which is what I've been doing.
Sounds confusing but once you do it once or twice, its cake.