I wouldn't even try it...those things are unstable even without mod chips.
The firmware flash doesn't adversely affect the console in any way. Assuming you can flash it correctly in the first place (which is not very hard), it will be just as reliable (or not reliable) as it would have been otherwise.
Now a chip is much more risky and not really worth it IMO when you can flash the drive with little effort, especially considering that the chips do not give you many other added features besides some recovery options, and possibly multiple firmware choices (not sure on that one, I haven't looked into chips)
if your 360 is going to 3ROD, it'll do it with or without a firmware flash.