I installed the 2.3b Lite Plus on 2 of my friends xbox consoles. I myself got a 2.3b Pro in my xbox which was a simple soldering job. It's really simple to intall the lite plus, the tutorial for which Team Xecuter offers is an excelant one, go here : http://www.teamxecuter.com/x23b_liteplus_method.htm
To make back-up games is pretty simple also, don't know what other people do or use, but either way you have to FTP to your xbox, then transfer all the files from D:// on your Xbox to a new folder on your comp, then just make it into a ISO file using Qwix101 , then you can burn to a dvd-r using Nero or somthing. You can find out how to do this easliy just got to http://www.xbox-scene.com/ and read some tutorials, that's what I had to do first time, now I can do it with my eyes shut.