1. yes. if you look at the readme of the modchip hex it gives you the colour descriptions.
yellow = reset detected
red = something wrong
all 3 means entered debuf of cpu correctly
green = cpu exited and patched ok.
2. By attaching the modchip, you are bypassing the bootloader protections in that it doesnt check sig of nk.bin and its contents, boot attempts and generally allowing ANY code to be ran on the box. It doesnt change anything on the normal to BT (or your provider) so will try to connect as usual to their servers for updates and general config. This will only work fully if you have a subscription to work.
3. Normally, the box connects to a server as stated in bootstrap url in tv2config.xml in the /content folder, it cant connect , then crashes then reboots. Several mods have been done to the app and logs of what its trying to connect to have been made but its a very complex syste,w here the server tells the box pretty much what it can watch and when never mind record it :s
4. If you get a full recovery mode sequence the hard disk1 partition is formatted , redownloaded and we start from scratch again. At present, the newest kernel / tv2 has tweaked a few things and stopped us from running our own exe outside of the nk.bin container, therefore the previous version (505 i think) is desirable at present.
If you have a bachup of the contents of hard drive1 then thats all you need as is the 'bootup / application' partition
