So, it's been awhile, and I've been playing Naruto since then. We're pretty happy together, although apparently, i'm no where near as good against other people as I am against the computer.
Enough with the catching up. I thought I would post this link to a stackexchange thread on this very issue, albeit a bit differently.
http://gaming.stackexchange.com/questions/125588/can-i-install-a-game-onto-an-xbox-360-from-an-image-on-a-flash-drive
If no one wants to go to the link, allow me to summarize the findings:
If a friend has a legit copy, and I have a scratched legit copy, it's perfectly okay to use his disc to install on my xbox, as confirmed by Xbox Support.
However, the use of pirated materials to install the disc is apparently not okay, although I didn't see the alleged link that was supposed to confirm this. I'll probably check with XBox Support myself and determine it definitively. Why? I'm feeling nostalgic and my Halo Wars has been scratched way beyond repair, but still able to be detected.
Additionally, it appears from Cole's answers that Xbox really only cares that you own a legitimate copy at the time of install and whilst playing. Again, I'll check for sure, but my best option at the moment (and one I've used before for UFC) is to buy the game, install it, and then return it.
I hope this helps anyone else who runs into this problem, instead of immediately being shut down and berated for piracy. Yes, there are pirates, but that doesn't mean you default to "Piracy is bad, therefore all answers to this question are bad" whenever asked.
Transcript from the support verifies that downloading the ISO and using it is illegal, although the chat representative made it seem as though she either didn't fully understand what I wanted to do, or wasn't knowledgeable of the legality itself. I say this because there were extremely long pauses, after specific questions, followed by rather brief answers. But, I won't be the one to decide how any individual should proceed so, here it is:
Chat Representative: Thank you for contacting Xbox Chat Support. My name is Chat Representative. Please give me a moment while I review your concern.
Chat Representative: Hi Savvy_01. I've read on your concern that you have issues on your game disc.
Chat Representative: I'll try my best to help you.
Savvy_01: Correct. Specifically, I want to know whether or not I can use a downloaded ISO file on a burned disc to install the game onto my hard drive, and then use the actual, legitimate copy to authenticate and play said game.
Chat Representative: I understand. I'll double check that for you,
Chat Representative: To proceed, may I have the email address associated to your Microsoft account please.
[What follows is my struggle to gain access to my original email address, met with failure, and then success. It’s a tragic tale, but a personal one. I hope you understand]
Chat Representative: Going back to your concern, you mentioned that you want to know if you can use a downloaded ISO file on a burned disc to install the game onto your hard drive.
Chat Representative: I've checked on our system if that's possible.
Chat Representative: As I've checked, using a burned disc with the ISO file is not supported and therefore won't be possible to use on the console.
Savvy_01: Is this a matter of legality or simply because as they exist, ISO files are useless with the security checks, even for basic installation?
Chat Representative: Legally it's not allowed.
Savvy_01: Alright. Thanks for the info.
Chat Representative: You're very welcome.
Chat Representative: Is there anything else you might want to clarify?
Savvy_01: The last question I have is whether or not it's possible to somehow play the game, despite its irreparable condition. The code side of the game is flawless, but there's a deep scratch on the other side of the disc, preventing it from being played.
Chat Representative: On that case, it won't be possible to play the game since the disc itself is already tampered and this will greatly affect the game.
Savvy_01: So, my only option at this point would be to buy another copy, install it, and then return said copy, using the original, scratched copy to authenticate the install? I've done this before with another game years ago, but I want to make sure this is still valid, and whether or not it's legal.
Chat Representative: What I suggest is to buy the game disc itself to make sure that it will work and to avoid any legal issues.
Savvy_01: So buying the game disc, installing it, and then returning it is not an option?
Chat Representative: I understand that you want to play the game. And the only option is to buy the game disc and install the game with it.
Savvy_01: Alright then. Thanks for your help!
Chat Representative: You're very welcome.
Chat Representative: Is there anything else I may help you with?
Savvy_01: Nope, that covers everything.
Chat Representative: Great.
Chat Representative: If that was everything Savvy_01, I'd like to thank you again for contacting Xbox Customer Support. To properly end the chat session, please click on the "Close chat" button on the upper right hand corner of the chat window.
Chat Representative: Have a wonderful night!
Savvy_01: You too!