1.)how to do people make back up copies of games? Use a DVD Drive flashed with Kreon Firmware
2.)can they be used to play online like the original copy? As long as they are properly stealthed and verified using agbx
3.)does it matter what kind of drive i use to make them? There has to be kreon firmware available for it.
4.)does it have to be a dual layer burner? Yes
5.)is it illegal to sell them? yes
6.)is it illegal to make them? Its is not against the law to create ONE Backup for insurance issues.
7.)what programs do i need to burn the games? imgburn. agbx
8.)do i need CFW (custom firmware) to play back up games? Yes, 1.6 is the latest
9.)can i get banned form xbox live for playing back up games? Anyone modification to your console is a warrent for banning, use at your own risk.
10.)is it possible to reverse CFW on the xbox back to its original firmware? As long as you save your original firmware before you flash the new one, and keep your key.