Flashing is the process of rewriting the firmware. The most common is DVD spoofing, in which you trick the DVD player inside the 360 into thinking that whatever game is inserted is a verified original. This allows you to play "backups," or in other words, download 360 games and play them without purchasing the actual copy. I will insert the PIRACY clause here so that all the self righteous nut jobs can go ape shit flaming me here.
J-Tagging can only be done on kernels that are prior to .8955 (I believe). In other words, if you've recently been on XBOX Live, anytime since summer 2009, really, then forget it. Your Xbox is no longer J-taggable.
Anymore questions, feel free to ask. As far as I know, J-tag Xboxes still cannot be used on XBOX Live, as they get ban hammered quickly. The DVD flash still carries the risk of getting banned, but it is much lower than that of the former.
JTAG consoles in combination with modified dashboards like freeboot 0.32 with dashlaunch 1.0 update essentially allow the system to run homebrew from attached devices like the HDD or USB HDD. (usually the homebrew will tell where to install it via NFO or readme)
If you are lucky enough to have a JTAG able unit, one program that is a must is XeXMenu 1.1 for it's FTP feature so you won't have to keep removing the hard drive.
ISO2GOD and NXE2GOD are also worth their weight in gold since they can turn your games into the Games On Demand containers for play without the discs.
There's a fair amount you can do with them. But a bit of searching can tell more than I can.
how do I flash it? I keep seeing different ways to do it.
There are plenty of sites that have tutorials on how to do it. You must first download the ixtreme firmware, and then just youtube or google a tutorial on what exactly to do in order to flash your drive. Make sure though that you have a S-ATA compatible card or you are out of luck. I
t shouldn't take more than 10 minutes. If you have never done any kind of work like this, then I don't recommend you venture forth (of course feel free) because you might end up bricking your drive or making it completely useless. STUDY a lot, from a bunch of different sites, until you are 110% confident that you can proceed forth.
It really shouldn't be that hard, but then again I already had this kind of experience so it was relatively easy for me. But again, STUDY STUDY STUDY before you do anything.