The LED is a matter of how the NKPatcher was configured. Before compiling it you can chose boot functions like power boots XMAS lights and hacked dash, open button boots green and backup dash, open and close boots red and softmod menu etc. You can change the LED settings in UnleashX by going to system. When it comes to using XBOXHDM and this goes for my releases, ldots releases and ldotsfan releases you MUST have the HDD you are looking to mod set to MASTER and hook it to the PRIMARY IDE channel, your DVD drive must be hooked to the SECONDARY IDE channel (in the case of a SINGLE channel PC set the DVD to SLAVE) also before even booting the disc go into BIOS and disable detection on the PRIMARY channel (some BIOS say things like MANUAL and AUTO DETECTION- manual=disabled) This prevents the BIOS from taking possesion of the HDD and you wont get that annoying HDD FROZEN or SECURITY FROZEN error otherwise you will be unable to access the security layer of the HDD which is required for building an HDD for a softmodded XBOX.

Before even thinking about an HDD upgrade you need to back up your EEPROM and FTP it to your PC. Without that file you cant build a new HDD for softmod. As you are new to this I would strongly suggest using Babylon2 as it includes 1080P step by step video tuts, and can create you installer discs for XBOX and PC, do softmods and HDD upgrades. And if going SATA you must use an adapter that has JUMPERS and set it to CS. As for USB in FATX format 4GB is the max partition size (SD cards work best as the memory controller is standard where as thumbdrives memory controllers are not and functionality is hit and miss) Once modded the best thing to do is format the USB/SD to FAT32 allocation size 4096 this will allow both your PC and XBMC to access it. Larger than 4GB does work (very poorly) in UnleashX. When LegendaryFire and myself made USB FATX Formatter we got a Fujijitsu 120GB FAT32 to read (only registered the first 10GB) but wouldnt allow access (no WMVs would play or copy etc)

@Zorlon
if you want the latest softmodding stuff, tuts/videos and goodies I can give you access to the Google Drive for my site and the ones I set up for EmuXtras and you can hotlink the stuff here. Just drop me a line.