Actually - there is some truth in what your friend says.
With the previous xbox, "chipping" was fairly easy to detect, as the chip bypassed and forged certain elements on the main motherboard of the machine, and had its own bios running on the box. Very easy to detect online by some clever software.
The problem for MS this time round, is that in order for a machine to be "chipped", you do not need to modify any chips on the main board at all, its actually the firmware of the dvd drive that is modified. The dvd drive passes relevant codes to the main hardware to verify an original disc is in the machine, and hey presto, it works.
It is very difficult for MS to develop any software that will run on the main console that can investigate the status of firmware on the DVD drive, aspecially if this Firmware on the DVD drive is pre set to give the "right" answers.
To be fair, for me, losing the enjoyment I get from playing on line is not worth the risk of chipping in order to play pirate games, though its always funny to see people moan on the xbox forums whe their consoles stop working. Unlucky.