First you need to open the case:
http://www.anandtech.com/systems/showdoc.aspx?i=2610&p=2
The only tools you need are:
1 x 'torx 10' screw-driver, 1 x paperclip or thin screw-driver, 1 x thin flat-head screw-driver
Second you need a VIA 6421 SATA controller (to support all drives, some other SATA chipsets only support certain 360 drives).
If you have a Lite-On drive (in almost all models manufactured since April 2008) you will also need a serial port connection.
Thirdly you need JungleFlasher - supports all drives, including the new Lite-On drives:
http://dwl.xbox-scene.com/iriez/JungleFlasher.0.1.51.Beta.rar (you may also need the PortIO driver - also found at Xbox Scene, or Eurasia below)
To use modified firmware you will need to download the latest firmware for your drive: