The jacks where you put your game controllers in are controlled by an USB 1.1 root hub at 8 megabit per second datarate. You can theoretically plug in any hardware using an adapter. You can plug in a usb network controller, a keyboard, a mouse, just any USB device. Some people managed to run linux kernels on the X-Box.
X-Box uses a 733 MHz CPU of the 686 series, 64 MB of memory, a GeForce-3 graphics core supporting DirectX 7 (DX 8 also supported? Don't know.), DVD-Rom and of course a LAN-Controller @ 100 Mbit/sec.
Maybe these sites can help you:
http://www.xbox-linux.org/ http://www.xbox-linux.org/wiki/Xbox_HDTV_HOWTO