I saw a generic hard drive on amazon that says that it spins at 7200rpm, which is faster than the microsoft 5400rpm. I have 2 questions about it. Will you get banned for using that hard drive? Does a 7200rpm have an impact on the xbox 360 speeds?
You will not be banned. The only advantage will be faster reads/writes from the HDD, meaning faster startup times for games, for instance.
To install the HDD, though, you will need to prepare it to be formatted in the Xbox using a tool called Hddhackr. I recommend you to look for feedback from people who did it before to know which HDDs are known to work with Hddhackr.