If you install a chip you still have to flash the DVD-Drive, the only thing the 'chip' does is allow you to flash the Xbox without having to open up the case every time. You'll still have to open up your console to install the chip.
The chips allow you to go online, however there is no way to bypass getting banned. It may not happen for years, it may happen within weeks. There is no sure-fire safe way to take a modded console online.
Your old backups might work, if not you can always rip them and burn them properly. Of course not every game works on the console, they need to hurry up and get Beyond Good and Evil up there...great game and I can't play it.
Flashing. Even if you had to buy a sata card for your pc, it'd be cheaper than a mod chip.
ATM, you can go on LIVE with all the chips. But it's a bad backup that MS will detect, not the chip. Of course, this may change in the future.
Chances are your Xbox 1 backups won't work. They need to be ripped the same way as 360 games. Most of the programs used before to rip Xbox 1 games didn't extract the security sector, and that's needed for the 360. Also, unless your 360 has a samsung drive and you use old xtreme firmware, you'd have to burn your games to dual layered discs.
