BIOS wise if it boots the way you want (certain ones do button combos/power on with eject to take you back to stock menu and the like) you are good really. Not a lot was gained with later mods.
"update the dashboard,xbmc"
First some use XBMC as a dashboard, might even be the case here. I like XBMC as a dash myself, boots a tiny bit slower than some others (maybe 7 seconds as opposed to 2).
If you are on 3.1 now then you are not going to gain an awful lot
https://www.xbmc4xbox.org.uk/category/releases/ , certainly not suddenly going to start working with high res H264 video or anything and even modest standard def H264 is still going to be tricky. XBMC (these days called KODI) is still a wonderful program but use it on a raspberry pi or old computer or something if you want a video player and your videos are the sorts of things you find on torrent sites and Scene archives.
If you can find a copy of auto installer deluxe aka AID (and your DVD drive still works) then that will probably do you well. Otherwise I hope xbins, and by extension auto xbins, is still active.
https://www.xbins.org/index.php?action=catsearch&searchtxt=XBOX for the sort of things it contains.
You will find that most xbox homebrew was built with the official SDK from Microsoft. As such you can distribute source and talk about the stuff you can do with it all you like but the compiled result is harder to share publicly and everything is a bit more hidden than the likes of the DS, Wii, PSP...
Most xbox homebrew fiddling that is not done via AID is done via accessing the FTP shares every dash enables by default (sometimes with different passes, mostly xbox and xbox for user and pass). If you need a FTP program
https://filezilla-project.org/ is good stuff.
Once you are in that you will be given multiple "drives" like C, D, E, F (possibly G as well) and X,Y and Z.
C is the main hard drive (or a fake one some softmods did to protect the real one) that contain the files the xbox needs to run. To that end don't touch it unless you really know what you are doing.
D is the DVD drive. If you want a file from a DVD then use this, otherwise not much use.
E is the first drive with saves, possibly some applications, likely some parts of the dash in the case of XBMC and more. It is only a few gigs so most people with a large drive like the one in yours leave it alone, or put their essentials on it -- you might have around 2 gigs free so that is enough for an emulator collection and some ROMs that you are not going to want to delete.
F and beyond you start getting when you have a bigger drive in there and where most people stash the isos, programs and such if they are loading them from a hard drive.
X,Y and Z might not be visible to the dash/FTP but are what games copy textures, levels and such to when they run so ignore them.
That should be enough to answer your questions and get you started.
