From what I have seen it appears to be the HDD and DVD-ROM unique ID's that are being checked.

If you haven't changed your HDD or DVD-ROM SINCE YOU FIRST LOGGED IN WITH XBOX L!VE you should be OK under this recent round of bans.

I changed my hard disk about 6 months after using live, in fact i can tell you now exactly when I did it. I got live just before xmas 2 years ago, and swapped the hd so thats exactly 10 months after starting using live which was .
From what I have read, MS did an audit a few months ago, and have banned people who have changed since then. At this moment in time, I am expecting to be banned, yet have just signed into live on PGR2 with no problems at all. I think its anything in the last 6 months which must have been logged, but at the moment things are fine for me here.

Also, I used slayer 2.6 a week or 2 ago to rebuild my c and e drives, dunno if I was lucky, but I have just connected again now, so seems to be ok. I think the loging of id's against gamertags seems to be the way they have done it, they appear to have banned anyone who has been banned before, so luckily I got away with it. At the end of the day though, anyone can subscribe to the pay monthly option, least you dont lose £40 if they ban you.