I recently saw a man who had put his first-gen Xbox in a fishtank very nicely to oil-cool it. I'm too cheap to so it that way.
I am in possession of a slightly useless first-gen xbox; it freezes up during fast games but otherwise works perfectly. Thus, I was the perfect candidate for trying this - nothing to lose!
I shall chronicle for you how I oil-cooled my xbox with around-the-house items for a net amount of $0. It doesn't look as good as the nice way, but great for the student or just generally cheap diyer.
NOTE: yeah, the desk I'm doing this on isn't clean. Deal with it.
BIG NOTE: I'm not responsible for any damage to your xbox, spills, nuclear war, etc. It's your problem. Worked for me, but I can't guarantee you won't screw it up.
Step 1: Disassemble your Xbox.
I did this ages ago, so use one of the may online guides. May I suggest www.wikihow.com/Disassemble-an-Xbox The torx bits aren't really needed; a very small flat-head screwdriver will do the trick.
Step 2: Select your container.
Now find a medium-sized plastic container to hold your xbox. Personally, I had a plastic cereal container lying around that fits the xbox motherboard like Microsoft designed it.
The drives stay outside of the container, so don't worry about room for them. Instead, worry about getting the cords to reach them.
Remember, a tighter container means less oil to fill it with. Mine took just over a gallon to fill.
Step 3: Position everything.
Now, figure out how everything has to be positioned. I did mine so I wouldn't need to extend the wires at all. YMMV, some wires may need to be extended.
I used a bit of duct tape to attach the controller connectors and power/eject buttons to the bottom of the mobo. In hindsight, I would extend these or something; I have to turn it on with a fork.
I first tried with the power supply at the bottom of my container, but that didn't work when the power cord was added - check with the cords attached so they don't interfere.
I later decided to put the power supply next to the motherboard. I'm a bit overcautious, so I cut some rubber shelf liner into a non-conductive separator between the two.
Step 4: Put it in the container.
In the vertical postion my container used, I found the easiest way to make everything sit well was some thick wire through two of the mobo holes, over the edge, duct taped down. It is extraordinarily sturdy.
Step 5: Attach the drives.
Now attach the drives to the outside of the container. This will be different for everyone depending on the container. I did it pretty badly, and redoing the drive attachment is on my todo. Ugly as hell.
Now, fire it up for a dry run! This is a good time to make sure it will work at all. Don't worry about the lack of a fan, it should only be on for a few minutes for testing.
Step 6: Add oil.
I used a little over a gallon of vegetable oil I found in my family's pantry. Any vegetable oil should do. I suggest leaving the xbox on while adding the oil to be sure nothing bad happens.
If all is well, you're done! And out little to no money to boot.
Also, if you leave the buttons in the oil the green leds have a cool effect glowing.
The oil cooling didn't help with the issues my xbox was experiencing (I think it needs a hard drive), but it is a lot quieter sans fan.