From the main menu you should see 'Waffle Zone Tool' press 'A' to enter this menu and you should now see the options as the above photo. From this menu select 'Install UXE Package' and press 'A' the script will start copying the needed files. After it is done copying the package, it will boot to Linux and make a backup of your EEPROM. On a 1.6 Xbox, your screen will probably display a corrupt unreadable image, this is fine just ignore it for now and watch for your LED to flash green which means the process is complete. If your not sure just eject your game disk and power off the Xbox after two minutes, this should be more than enough time to create the EEPROM backup.
Power back on and without any game in the DVD-drive your Xbox should boot to the UnleashX screen you saw earlier. The first thing you should do is FTP into your xbox using the IP address shown on your dashboard (user=xbox pass=xbox) if you need information on using FTP click Here. Now copy the EEPROM back-up to your PC's Hard-drive, the back-up will have been made of your original MS Dash, as well as the installed UXE package in E:\Backup\. Your EEPROM will be saved to E:\Backup_linux\, copy these folders and burn them onto a CD to keep them safe. If you don't see the files look on the root of drive E:\ as newer installers put the file there, REMEMBER these are the keys to your Xbox, loose them and you won't be able to recover from a Hard-drive failure or other problem.
Verify that your Xbox will Play an Original game and then try a back-up version, If these test work you have successfully applied the UXE package.
If you would like to install a Larger Hard-drive or simply need to replace the existing Hard-drive due to failure then you need to read this article Here.
Using the Xbox 'Live'
If you desire to play online you'll need to make sure you never modify the files located in 'E:\Backup\' or 'E:\Backup\Modded\' if you do then the included scripts won't work correctly as the scripts expect the files it needs to be located in these directories.
To reset your Xbox to the Microsoft Dashboard simply choose 'Waffle Zone Tools' press 'A' to enter this menu and now select 'Backup Menu' and press 'A' the next item to select is 'Restore Unmodded Backup' press 'A', the script will start copying the needed files, after it is done reboot and play the Games you want online (of course you need the Original game).
A possibility exists that Microsoft will eventually implement a check for these type of exploits and when discovered will Ban your Xbox from be able to use the 'Live' service.
When you want to revert back to the Softmod you basically repeat the steps to do the exploit the first time with the exception that you should choose 'WaffleTools' then 'Backup Menu' (NOT Install UXE Package) now here simply choose the option 'Restore Modded Backup' this will copy the files needed to revert your box to the UnleashX dash, once complete reboot your Xbox and you should be back to the UnleashX dashboard.