A JTAG is a hardware hack that is used to flash a device with different firmware. You can jtag cable modems so you can clone your mac address and steal the internet (it's illegal so don't ask). You can also jtag an xbox 360 and use an exploit found in the older xbox dashboard to rewrite the nand chip. The nand is kind of like a bios chip on a computer, when you flash the bios on a computer you're changing the way the computer interprets the information.
Anyway a jtag for an xbox allows the xbox to be flashed so it can do things microsoft designed against. You can run homebrew or run any unsigned code so almost everything is accessible. You can hook up large external hard drives and format them to be used with the xbox. There aren't many limits. You can copy a game directly to the hard drive and play the game without the disc.
Now what you're talking about is when someone modifies the code to the game and then hosts it so the code it transmitted down through the chain. The host can set any values to any attribute they want. In the prestige hack the kills are set so every kill = 1 prestige. All that the host has to do is modify the map attributes and load the game.
As for the Jtag itself it's becoming more rare by the day. There are only so many xbox's that can be jtaged because microsoft was aware when homebrew was finally accomplished on the xbox 360 system and the exploit in the dash version was closed and the dash was updated. To jtag an xbox you have to have a dash older than 2.0.8. Anything 2.0.8 and up is not jtagable.
There are different chipsets the xbox has used over the years.
The first is the xenon, xenon was a launch console without hdmi and a 203w power supply
The second is the zephyr, zephyr was the first hdmi with a 203w power supply
The third is the falcon, falcon was the first with the new cpu that used 175w power supply
The forth is the opus, opus was a falcon chipset without hdmi (only available by repair)
The fifth is the jasper, jasper uses a 65nm die process to decrease heat, uses 150w power supply
Now as you can probably figure out the first few designs were pretty horrible and broke a lot. This actually increases the chances of finding a jtagable xbox because if it broke a year ago odds are that is has an older exploitable dash. You'll see these broken jtagable xbox's going on ebay for about $120. For a Working jtagable xbox it can be 150-200. For a jtaged xbox it can be 350-400. You get the idea.
I've been repairing consoles for quite a long time and have ran across about 10 jtagable consoles so they are out there. Just try to find one that's broken and then have it reflowed by a professional to make sure it won't break on you.
Hopefully this is all the info you were looking for, but if you have any other questions feel free to contact me. You can contact me via my yahoo answers profile.
Bachelors A+/MSC - 9 years modding/fixing computers - 7 years modding/fixing xbox's