I do. I've been using live for 3 years now. You have to be smart about it. Make sure every "back up" is a retail version that's stealthed. Don't play (ever) review versions. Never play a game before your region's release date. Doesn't matter if you did legit'ly buy it in a store early, M$ will still ban your console. The theory atm is that they track your awarded achievement date when they're deciding to make a ban or not. So if you got Fallout 3 a month early and got a 1000/1000 gamer score on it, you're asking for a ban (they keep a record of who is using the review copy and who should not have it. You have to include info when you agree to review a game).
If you do get banned, they just ban your console. Not your Gamer Tag. So keep the banned console and get a new one ($200.00 is cheap for some). You can always keep playing on system link. You can also use the not banned console to update the games. But good luck flashing a new console. The Lite-On is still a bitch to spoof. Maybe by July 09 we'll be able to do it successfully.