I could flash it but i live in Bristol :/
It's fine to go online with it when it's flashed. I did mine a little over 6 months ago and im still playing online with no ban. There's just certain precautions you need to take.
For example, make sure all games you burn / buy are stealth patched correctly.
Make sure you don't play games before they're released in your country. Also, don't tell anyone your console is flashed, and when there is an 'update' or a suspected ban wave, just unplug your console from the internet and wait for the all clear.
Several forums are around solely based on xbox flashing, copied games etc. I'd recommend
http://www.xbox360iso.com. Check they Buy/Sell/Trade section and try to find someone who lives in your area. Also, go to the thread at the link
http://www.xbox360iso.com/showthread.php?t=77870 if you don't know how to do games. He does 5 for £10, and they actually look like the real thing (he does the labels on the discs with a high quality laser printer and they look incredible!)
People think there's a high chance of getting banned but there really isn't if you know what you're doing. Remember though, there is always the possibility so obviously only do it if you're not worried about the consequences.