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They still do, just not as much. Exactly. They still do make them, but most of the Xbox video gaming population has gone to the 360, so they make more games for that. After all they want to make as much money as they can.
Make sure you have a hard drive on your Xbox 360, then you can play old Xbox games.
They make some games because theres a Madden 09 for the Xbox
Due to the fact that there are so many Xbox 360s out there that they will continue, but that is unknown yet as Microsoft has not release much information yet.
if by modded you mean a flashed then yes but evan if you are playing official xbox 360 games you can still get banned from xbox live