1. Custom firmware for the DVD rom - This will work on all drives for all consoles but the new Slim 360 "except the first batch of Slims with the Liteon 9504 drive". This will allow you to play backups burnt to DVD+DL disks. This DOES NOT allow ANY type of homebrew to run. This means no alternate dashboards, no emulators, no game editing etc..
2. JTAG/freeboot - This is what you want if you want to do everything homebrew such as alternate dashboards, emulators, running backups from hard drive without the disk, etc etc. This type of mod is OFFLINE only and will get you a very fast ban if you should log into live by accident.
This mod comes with some very strict limitations to what consoles can and cant be JTAG'd. Some of these limitations are...
The JTAG CANT be done on ANY console manufactured after June 18th 2009. Also ANY console that has been on Live since last summers (summer of 09) dashboard update and has played ANY game that has come out since late summer 09 cant get this mod as well.
To determine if your console can be jtaged do this.
Look on the back of your console to see the manufacture date. If it is older than June 18th 2009 then you can go to the next step. Turn the console on and go to the system settings then console settings. Scroll down to where it says console info. Look for the kernel version. If it is anything from 2.0.8495.0 or higher then there is no JTAG in the future for that console. If however it shows 2.0.7371.0 or lower you pass that test then you can move onto the third and final test. Pop off the faceplate and look to see if it has a refurbished sticker on it. If it does there may also be a good chance it cant be jtaged. You wont know for sure until you dump your consoles NAND to check what CB version you have.