Not much of an update but I have fixed the first problem of the screw holes on the xbox shorting the motherboard by taking a
to them. Gave me a chance to test the dremel as well, it sounds like a plane taking off!
I have also done a cardboard mock up of the motherboard so I can drill the standoff holes but that isn't really worth a picture.
As it stands I am going to have the motherboard at the top of the xbox (as it stands vertically).