I belive its a file on your xbox which tells whether or not your banned. not really sure though. if you replace a banned one with a unbanned one on a Jtag it unbans it. Let me search forums real quick :blink:
Don't quote me on this but, I think of it as an Xbox's ID. You extract it from the NAND Flash of an Xbox (no matter if it's banned/unbanned doesn't matter because it can still be extracted). Unbanned preferably it is sold to someone who has a banned "JTAGed" console that can rewrite its NAND (since it can run unsigned code) and become unbanned.
And just to add, KVs never "come back" that's why the pricing is high.