What a fun thread. Wish I would have looked into it sooner-- congrats on your find!
First tip I have for you is, if you don't have a DVD drive in it yet, try your best to get a Samsung rev B (or version B; can't remember). This was the clear winner in the OG Xbox days, as unlike the common (and crappy) Thompson drives, it was able to read CD-Rs without an issue. Officially, Microsoft would not admit to a difference in media compatibility between drives, but it was there. Sounds crazy that a device from that time was incompatible with CD-Rs, but Thompson owners were usually well aware of this. (I discovered the issue after seeing my friend copy a burnt music CD to his Xbox; I couldn't figure out why he was able to). Phillips drives are a little rare, and while not the best in compatibility, is still better than a Thompson.
As for your AV cable issue, the best I can recommend is HD component cables, as VGA was strictly not supported. You could modify your Xbox to output VGA, but I remember it requiring either custom cables or bioses. If both component and standard AV cables don't work, then sadly you are most likely S.O.L.
Now for the eeprom... You can try it, and it might work, but I strongly recommend keeping the original eeprom and locking a new HDD to it. I used to be a huge original Xbox need, and at one point moderated/administrated at Llamma.com (RIP). Based on what I used to know, I seem to remember the eeprom was more than just for locking drives to the console. It may have even stored region information in it. I wish I could remember clearly, but this is why I'm leaning toward keeping your original dev kit eeprom (you may get a FRAG). Another significant eeprom info is, the eeprom was what M$ used to ban consoles from Live. So to unban a console, you needed a clean eeprom (and either a way to lock a new drive to it, or the original HDD). This doesn't apply to dev kits, but once a HDD and eeprom pair connected to XBL, they were considered "married" (though only enforced online)
The only other thing I know about the eeprom that is significant is, when you lock a HDD to it, it uses the serial number of the HDD to do so. You can lock multiple HDDs to one eeprom with no problem, so it seems that something is saved to the HDD to confirm the lock. This is good to know if you start with a stock HDD (8GB IDE) and wish to upgrade later. If you use an X3CE, you can lock/unlock straight from the bios. Otherwise be prepared to use either Super Disc or SlaYers to do the job for you. If I were you, I'd skip the 8GB drive and go for a bigger one. IDE drives above 8GB are fairly cheap these days.
My main point on the eeprom talk is this: it was a very central part of the console, much like Keyvaults on the 360. I don't believe there was much (if any) unique information stored on the TSOP (NAND?) itself. Hacked bioses just overrode the onboard one, and there was no special preparation to flash one (CPU key? OG Xbox says "lol wuts that"). You could simply download a hacked bios and flash as is to your modchip so long as it was compatible (for example, a 512kb X2 bios would not fit on a 256kb chip... For obvious reasons. Also, X3 bios is only compatible with X3/X3CE)
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