Okay, here's more detailed instructions for those wanting to try this mod. This is all based on Rafael's MCE Exposed Guide. See the links at the bottom for the various components you may need:
1) Install the .NET Framework 1.1 SDK (and the .NET Framework 1.1 itself from WindowsUpdate if you don't already have it) from [http://www.microsoft.com/downloads/details.aspx?FamilyId=9B3A2CA6-3647-4070-9F41-A333C6B9181D&displaylang=en]
2) Copy the "ehshell.exe" file from "C:\Windows\eHome" to a temporary directory.
3) Run "ildasm" (under "C:\Program Files\Microsoft .NET\FrameworkSDK\v1.1\bin"). Open the "ehshell.exe" file from wherever you put it. Go to File > Dump and in the options dialog that appears afterwards make sure only 'Dump IL Code' and 'Expand try/catch' checkboxes are checked. Click ok and save the resulting IL file in a separate directory (resources will fall out hence the new directory) and call it "ehshell.il". It should be a whopping 20-30MB.
4) Open the "ehshell.il" file in a text editor (Wordpad or Notepad if necessary, but preferably something a bit better - Wordpad/Notepad may take a LONG time to open the file!). Search for the string "get_UsableVideoMemory". Just below that, you should see a value of "0x2000000". Change this value to "0x1000000", so that you see something similar to the text below. Save the file (waiting patiently) and close your editor.
IL_003d: call int32 [EhCM]eHome.UI.Drawing.Dx7OutputDevice::get_UsableVideoMemory()
IL_0042: stloc.1
IL_0043: br.s IL_004b
IL_0045: call int32 [EhCM]eHome.UI.Drawing.Dx9OutputDevice::get_UsableVideoMemory()
IL_004a: stloc.1
IL_004b: ldloc.1
IL_004c: ldc.i4 0x1000000
IL_0051: bge.s IL_0069
5) Delete the "ehshell.exe" in your temporary directory, and recompile the file by bringing up a command window, going to your temporary directory, and typing "C:\WINDOWS\Microsoft.NET\Framework\v1.1.4322\ilasm /resource:ehshell.res /exe ehshell.il". If this fails, try replacing your "ehshell.res" file with Turge's version posted at 12/8/2004 6:17 PM under the following link: http://www.thegreenbutton.com/community/shwmessage.aspx?ForumID=27&MessageID=78447&TopicPage=1
6) Rename the new "ehshell.exe" in your temporary directory to "ehshell16.exe" and copy it into the "C:\Windows\eHome" directory (renaming it stops Windows File Protection from overwriting it with the original version).
7) Allow the unsigned package to be executed by running the following in a command window: "C:\Program Files\Microsoft .NET\FrameworkSDK\v1.1\bin\sn -Vr c:\windows\ehome\ehshell16.exe".
8) Add a shortcut to ehshell16.exe to your desktop and give it a try!
If you follow all of these steps correctly, and still get the "Your video card or drivers are not compatible" error then make absolutely sure you are using the latest drivers for your graphics card. I also don't know if this will work on some older graphics cards (pre-DirectX9.0) - basically, I think it should work for anything on the official "supported cards" list that simply has too little memory fitted, plus most other DX9-capable cards. There are more mods you could try to force it to run on older systems but I haven't tried it myself and don't recommend it... I'm guessing MS limited MCE to higher-end systems for a reason! (I have an old laptop that doesn't run MCE even with this mod, using a Radeon Mobility 7500, so I'm going to experiment with drivers/hacks to see if I can get it to run when I get the chance).
Hope this helps!
[edited to correct compilation command line]