OK, we lied. Major Nelson made no online warnings about drug use, but he did issue a very stern warning against sharing Xbox Live accounts and/or cheating to increase one's Gamerscore. Sharing accounts is the worst violation, destroying your Gamertag and affiliated points and purchases forever. Cheating through game save hacks or "nefarious techniques" won't get you banned, but it may get your Gamerscore deleted.
But the real reason not to cheat on Live or with game saves is that it makes you a douchebag. And the real reason not to share your account is that it hurts
Microsoft starving babies and/or your parents' credit.